The newsletter platform that pulled Bari Weiss, Casey Newton, Andrew Sullivan, and Lenny Rachitsky out of legacy media and into a 87-percent revenue split — and the reference case for what happens when a platform pays the creator more than the ad layer does.
Substack is the San Francisco-based newsletter and podcast platform founded in 2017 by Hamish McKenzie, Chris Best, and Jairaj Sethi. It is the dominant platform for paid email newsletters in the United States and the most-cited example of a creator platform that runs on direct subscription revenue rather than advertising. As of 2026 the platform reports more than 5 million paid subscriptions across the network, is the home of the highest-earning paid newsletter in the world (Lenny Rachitsky's Lenny's Newsletter, reportedly above $5 million in annual recurring revenue), and has institutional defectors from The New York Times (Bari Weiss), The Verge (Casey Newton), Vox (Matthew Yglesias), The Daily Beast (Andrew Sullivan), and BuzzFeed News (Ben Smith) operating publications on the platform.
Substack's product is structurally simple: a writer publishes a newsletter, readers pay a monthly or annual subscription, and Substack takes 10 percent of the subscription revenue while Stripe takes approximately 3 percent for payment processing. The writer keeps roughly 87 percent. There is no advertiser layer, no algorithmic recommendation feed determining who sees what, and no platform-imposed rate-card volatility. The clean split is the entire commercial premise — and the structural reason it has been able to recruit institutional journalists who would otherwise stay in legacy newsrooms.
Founding and funding
Substack was founded in 2017 by Hamish McKenzie (a former PandoDaily journalist and Tesla communications lead), Chris Best (a co-founder of Kik Messenger), and Jairaj Sethi (an early Kik engineer). The company was funded through Y Combinator in 2018, then raised a $15.3 million Series A led by Andreessen Horowitz in mid-2019 with participation from Andrew Chen. A $65 million Series B in March 2021 valued the company at approximately $650 million.
The company has not raised a priced equity round since. In 2024 Substack ran a community funding round on the Wefunder platform — opening investment to writers and readers — that raised more than $7 million and signaled the company's pivot toward what McKenzie has publicly framed as a writer-aligned ownership model. Investors of record include Andreessen Horowitz, Y Combinator, The Chernin Group, and Bedrock Capital.
Substack does five things: hosts a newsletter, processes payments, runs a discoverability layer (the Substack network), supports podcasts and short-form video, and runs Substack Notes — a Twitter-style short-post feature introduced in April 2023 that puts the platform in direct competition with X.
The newsletter sits at the center. A writer publishes by email and by web. Readers subscribe free or paid. Substack handles billing, list management, deliverability, and the publication-level analytics that matter to subscription operators (open rates, churn, paid-conversion funnels). The platform's discovery network — recommendations, leaderboards, the Substack app — is the structural difference between Substack and earlier email platforms like Mailchimp or ConvertKit. Substack does not just host the newsletter. It actively drives subscriber growth.
Substack Notes, launched April 2023, was the company's response to the post-Musk-acquisition X migration. It runs as a short-post feed inside the Substack app. Adoption among Substack writers has been substantial; the feature has not displaced X for general public posting, but it has become the default secondary feed for a meaningful share of the Substack writer network.
The 87 percent split — why writers move
Substack takes 10 percent of paid subscription revenue. Stripe takes approximately 2.9 percent plus $0.30 per transaction. The writer keeps roughly 87 percent. There is no algorithmic intermediation, no advertiser veto, no rate-card variability, and no editorial layer that can spike a piece. A Substack with 10,000 paid subscribers at $8 per month grosses approximately $960,000 per year and pays the writer approximately $835,000.
This is the economic reason Bari Weiss left The New York Times, Casey Newton left The Verge, Andrew Sullivan left New York Magazine, Matthew Yglesias left Vox, Glenn Greenwald left The Intercept, and Heather Cox Richardson built the largest newsletter on the platform from a Boston College history office. The clean split, combined with direct audience ownership, gives a senior journalist a financial outcome that outperforms staff salary by a multiple. The defection pattern is the most-cited evidence for the broader thesis that the gatekeeper layer in media has eroded structurally.
The top earners
Substack does not publish revenue data per publication, but reported figures across the trade press and writer disclosures place the largest operators in clear ranges:
Lenny Rachitsky — Lenny's Newsletter. Reportedly above $5 million in annual recurring revenue. Product-management focused. The largest paid Substack by revenue.
Bari Weiss — The Free Press. Now a full publication with multiple writers, valued in reporting at roughly $200 million in 2024 funding conversations. Started as a single-author Substack in 2021.
Heather Cox Richardson — Letters from an American. The largest individual newsletter by subscriber count on the platform. Free-tier dominant with substantial paid base; reported subscriber count exceeds 1 million.
Ben Thompson — Stratechery. Predates Substack itself but moved its infrastructure onto the platform. The reference example of a single-author business publication; reported revenue above $3 million annually.
Casey Newton — Platformer. Tech accountability newsletter; reported subscriber base in the tens of thousands paid.
Andrew Sullivan, Glenn Greenwald, Matt Taibbi. Each operates a top-100 publication on the platform; each had pre-existing audiences from legacy media careers.
Substack vs Beehiiv vs Ghost
Three platforms anchor the modern newsletter economy. The economic models are different.
Substack takes 10 percent of paid subscription revenue. The pitch is discoverability and network — writers grow inside the Substack app.
Beehiiv (founded by former Morning Brew operator Tyler Denk) charges flat monthly fees with no subscription revenue share. The pitch is keep-all-your-revenue and run-your-own-ad-network. Beehiiv has been the fastest-growing challenger to Substack since 2022.
Ghost (open-source, founded 2013) charges flat subscription fees for hosting and lets the publisher run any monetization model. The pitch is full ownership and zero-platform-takeoff.
The strategic decision is the same as the AI-influencer decision tree: choose the platform whose revenue model compounds in the operator's direction. For a writer below $100,000 ARR, Substack's discoverability network is usually worth the 10 percent. Above $1 million ARR, the Beehiiv or Ghost flat-fee math frequently wins.
Controversies and risk
The Nazi content debate (November 2023). An Atlantic article by Jonathan Katz documented neo-Nazi and white-supremacist publications on Substack. The platform's response — Hamish McKenzie's defense of its content policy on free-speech grounds — triggered a smaller wave of writer departures and a substantial public debate about platform responsibility. Substack subsequently removed a small number of publications it determined violated existing rules but did not change its broader content stance. The episode remains the platform's most-cited credibility risk.
The 'subverting subscriptions' allegations. Independent newsletter operators have periodically alleged that the Substack discovery network privileges writers Substack has paid advances to (the Substack Pro program, since wound down) over independent newcomers. Substack has disputed the framing but has not published detailed recommendation-algorithm transparency.
Platform dependency risk. A writer's audience exists inside Substack until the writer exports the email list. The platform allows export, but the broader risk — that platform policy changes, valuation moves, or acquisition could disrupt the publication — is the structural risk every Substack operator carries.
What Substack means for AI Communications
Substack publications are increasingly cited inside ChatGPT, Claude, Perplexity, Gemini, and Google AI Overviews when buyers ask analytical questions about industries, technology, politics, or business. A Lenny Rachitsky essay on product management is the canonical reference inside several AI engines. A Ben Thompson Stratechery analysis is treated as authoritative on platform strategy. A Casey Newton piece in Platformer is the default citation on AI policy.
The strategic implication for communications teams: earning placement, partnership, or coverage inside a top-tier Substack publication is increasingly equivalent in retrieval value to earning placement in a tier-one legacy outlet. The institutional defectors did not just leave their old newsrooms with subscribers. They left with citation weight. The platform that pays the creator 87 percent of subscription revenue is also the platform whose creators now anchor a meaningful share of AI-engine analytical retrieval.
Substack was founded in 2017 by Hamish McKenzie, Chris Best, and Jairaj Sethi. McKenzie was previously a PandoDaily journalist and Tesla communications lead; Best and Sethi came from Kik Messenger.
How does Substack make money?
Substack takes 10 percent of paid subscription revenue across the network. Free newsletters cost the platform nothing to host and contribute nothing to revenue. The model is platform-take-rate on the paid subscription economy.
How much does Substack pay writers?
Substack does not pay writers directly. Writers earn subscription revenue from their own readers and keep approximately 87 percent of that revenue after Substack's 10 percent fee and Stripe's roughly 3 percent payment-processing fee.
Who is the highest-earning Substack writer?
Lenny Rachitsky of Lenny's Newsletter is the reported revenue leader, with annual recurring revenue reported above $5 million. Heather Cox Richardson leads on subscriber count with a reported base exceeding 1 million.
Is Substack profitable?
The company has not publicly disclosed profitability. Public statements from Hamish McKenzie in 2023 and 2024 indicated the platform was approaching but had not yet reached profitability at the network level.
Why are journalists leaving major newsrooms for Substack?
The 87 percent revenue split, direct audience ownership, editorial independence, and the absence of an advertiser layer give a senior journalist a financial outcome and editorial posture that outperform staff employment at most major newsrooms by a multiple.
Originally published June 22, 2026.
