The Future of the Newsletter

By Keith Teare • Issue #321

This week I contrast the views of Substack co-founder Hamish McKenzie and Vox’s Peter Kafka. And I couldn’t resist a few suggestions to Hamish. The Future of the Newsletter is the future of the network, whatever the outcome, so this is important.


The Future of the Newsletter

  • Substack is for Communities – Hamish McKenzie
  • The Newsletter Boom is Over – Peter Kafka

Essays of the Week

  • Taking the Pulse of Limited Partners in VC Funds
  • Harsh terms from VCs
  • YC Shrinks Class by 40%
  • What Twitters Office Closure Signals
  • Tinder Chief Leaves Months In
  • Robinhood Lays off 25%

Tracking Web3

  • Pearson Likes Blockchain for digital book resales
  • Messaging needed for Web3 Success – Tomasz Tunguz
  • NFT and Creative Commons Zero (cc0) – Andreessen Horowitz
  • Binance’s VC Fund
  • The Crunchbase Web3 Tracker

Startup of the Week

  • Coinbase partners with Instagram and Blackrock

Tweet of the Week

  • Remote – Doubling Down


Hamish McKenzie of Substack thinks.

“The last era of the internet has been dominated by platforms owning people, but the next era will be about people owning platforms.”

Vox’s Peter Kafka disagrees.

Here’s where I’m supposed to point out that regular people — people who can’t expense an expensive newsletter to their studio employer — are going to have a limited ability and interest in paying for lots of newsletters. And that newsletters aren’t just competing with newsletters for your money but with every subscription business that wants your money, from the New York Times to Spotify to Netflix. Oh and also: That we may or may not be entering a recession that’s going to make it harder to convince people to pay for stuff, period.

The future of newsletters leads this week’s newsletter. Funny, in an ironic kind of a way :-).

Both articles are well worth your effort if you are interested in where the internet will be taken as we, its users, engage with new tools and business models. For me, Hamish McKenzie’s article is more enjoyable simply because Hamish is a co-founder of Substack and at the core of its strategy and operations. Substack is for communities is a wish, backed up by some proofs. As a user, my advice to Hamish is to double click on that thought and begin to introduce more community features. A few I can think of:

  1. Enable @mentions of other newsletters and authors. If only I could say @Hamish, and he would see this reference somewhere, maybe in a feed where he could choose to put it into his #substack newsletter. Both the mention and the hashtag could have meaning.
  2. Enable following of authors, all the way through to their comments on others’ work.
  3. Enable “clubhouse” style video and audio live stacks where I could discuss my newsletter. Today I do that in a one-way video cast or audio podcast.
  4. Let me pull articles from my Substack app into this week’s newsletter, like Revue does with its interface (showing Tweets, shared articles, and RSS feeds as sources for my publishing.
  5. Figure out how to merge comments with social connections to enable a network to form around a newsletter. Today’s comments are orphaned in that they only sit in the specific post they are responding to. The mobile app would be a great place to enable cross-publication and cross-newsletter issue chats between linked people.
  6. Add tags – so that following hashtags across newsletters become possible.

I realize that many of these suggestions are inherited features from Twitter. Steve Gillmor and I have been talking about a lot of this recently as we have experimented with a “Substack Live” concept, so some credit (actually a lot) goes to Steve for the ideas but only the ones he agrees with (LOL). 

But back to the thread of an idea. Twitter is on the rocks. It’s Elon problem, and the product confusion around Revue and Twitter Reads represents an opening for a real social newsletter breakthrough.

Substack can certainly become the new core of interaction, publishing, and sharing. And dump the advertising-based ecosystem for a peer-paid network. One where we all earn credits for our work and engagement. Maybe NFTs and digital tokens can even play a role.

This is time for big, out-of-the-box thinking. Plaudits to Hamish for pointing the direction.


The Video accompanying That Was The Week is recorded separately on Fridays and delivered to paying subscribers via email. To subscribe, go to our home at Substack

The Future of the Newsletter

Substack is for communities

Substack is for communities

Kylie Jenner and a few hundred million other people have been complaining about Instagram’s new direction, which favors algorithmically recommended content over sustained relationships between real people. “[S]top trying to be tiktok,” Jenner demanded, “I just want to see cute photos of my friends.” 

TikTok is remarkable for a number of reasons, but chief among them is the platform’s ability to beat social media giants at the game they once played better than anyone: monopolizing a consumer’s attention. For more than a decade now, social media platforms have built insanely addictive online media experiences on the strength of their social graphs and the practice of “following” people and personalities in casual relationships. But then TikTok came along and created a mass media apparatus where the content matters far more than who made it. Instagram is right to be worried—but the people who make the stuff that gets shared on these platforms also have reason for concern. 

The Jenner Revolt highlights a key tension at the heart of the dominant social media platforms. It’s one of the problems Substack is trying to address. Instagram, TikTok, YouTube, Facebook, Twitter and the others can give people enormous reach, but they don’t give them much in the way of control. It is the platforms that decide who gets attention, and when. The platforms determine who finds an audience, and who doesn’t. The platforms influence who gets paid and who misses out. These platforms are often understood as hubs for online communities, but they compromise an essential element of community by mediating the relationships between the members. …..  •  Share

The newsletter boom is over. What’s next?

The newsletter boom is over. What’s next?

Remember when newsletters were hot? 

This was all the way back in 2020 and 2021: Big Name Writers were leaving Well-Known Publications to start one-person publishing operations, and some of them were making a lot of money doing it. Serious people were asking whether Substack, the email platform of the moment, was a threat to the New York Times. Facebook and Twitter wanted in on it.

That was then.

Now newsletters are less … heated. Some writers who’ve gone out on their own have decided that they’d like a full-time job working for someone else, just like the old days. Substack has struggled to raise funding and has laid off some of its staff. Twitter doesn’t talk much about its newsletter plans anymore. And a year after launching Bulletin, its own Substack platform, Facebook has put the project on the “back burner.”

Which doesn’t mean newsletters have gone away. At all. Just some of the hype surrounding them. And in its place, there’s a more realistic attitude about the format and the business you can build around it: Newsletters, it turns out, are just like blogs and podcasts — they’re super simple for anyone to create. But turning them into something beyond a hobby — let alone turning them into a full-time job — requires talent and sustained effort.

“I don’t think it’s an easy path to fame and riches,” says Judd Legum, who has been writing his Popular Information newsletter since 2018. “But that was a thing that I never believed.”  •  Share

Essays of the Week

Taking the Pulse of the LP Community

Taking the Pulse of the LP Community

In May, we held the second annual RAISE LP-Only Summit with over 200 LPs in our community. During the meeting, we polled our attendees about their preferences, concerns and general sentiment during this rocky time in VC.

Two themes that emerged were:

1. There’s frustration with the excesses of the past few years.

When we asked our LP community about their most consistent frustration with venture, 55% said “excessive fund sizes” was most frustrating, and 23% said “Economics > 2/20” was most frustrating.

This clearly corresponds to the blowout fundraising in the VC market over the last few years and fatigue over those excesses.

We also asked the group, “When a firm comes back to market for a subsequent fund, how invested (i.e. cash in the ground) should the prior fund be?” The overwhelming majority (62%) felt that prior funds should have a minimum of 60% invested before starting to raise again, and 16% thought a fund should be at least 80% invested.

In current fundraising conditions, funds should prepare for a particularly chilly reception if they are perceived to be coming back too early.

2. LPs increasingly want to see specificity in funds: one stage, one sector.  

When asked the question, “If you had to choose just one approach, which would you want your venture managers to pursue?”, 71% said they’d want VCs to focus their efforts on one stage (e.g. Seed/A, late stage), vs. supporting companies across their lifecycle (29%).

And when asked, “What types of VC managers are of greatest interest to add to your portfolio?”, 72% said they’d prefer sector specialists, and about 10% would want geographical specialists. Only 18% were most interested in generalists.

Not coincidentally, we have seen the RAISE GPs over the past seven years become increasingly focused on narrower investment themes.

Finally, we got some insights into how LPs might deal with assets stuck in funds from firms the LP is no longer supporting. We asked them at what price they would consider selling these assets in a secondary transaction, and nearly half (45%) said they had assets they’d consider selling at or below NAV. And this was in early May!  •  Share

If You're a Startup Founder, Watch Out for This 'Harsh Term' From Investors - Inc.

If You’re a Startup Founder, Watch Out for This ‘Harsh Term’ From Investors

The game has changed for early-stage investments, and not in a good way for founders.

Venture capitalist Mac Conwell of RareBreed Ventures took to Twitter this week to warn founders that he’s seeing more investors adding a provision known as “full ratchets” into early-stage agreements.

An anti-dilution provision, full ratchets favor earlier investors when the valuation of a portfolio company decreases post-investment. As Conwell explains, “if a company raises money in the future as a lower valuation or share price, then the earlier investors get their equity readjusted to match the new lower price.” 

In a so-called down round, your earlier investors could end up owning substantially more of the company than they purchased at your earlier, higher valuation. If you sell 25 percent of your company to your first investors at a valuation of $10 million and give them a full ratchet, but then raise more money at a $5 million valuation, those first investors would now own fully half of your company, and you might no longer have full control over decision-making.

What should you do if you’re an early-stage company and a potential investor seeks to include a full ratchet in the deal? Conwell’s advice is plain: “As a founder in the early-stage, if you see this … RUN.”  •  Share

VC wells drying up: Y Combinator's latest class shrinks 40% - The Register

VC wells drying up: Y Combinator’s latest class shrinks 40%

Venture capital is the latest to feel the pinch from the economic downturn, with venerable Silicon Valley incubator Y Combinator’s Summer 2022 cohort consisting of less than 250 companies, down from over 400 last Winter’s list – a drop of 40 percent.

Lindsay Amos, Y Combinator’s communications director, confirmed to The Register that the incubator had done so intentionally, attributing the reduction to the current state of the economy. Despite the downturn, Amos said, Y Combinator’s summer 2022 cohort “is still a large batch relative to the last five years.”

“The economic downturn and almost certain resulting changes to come in the venture funding environment, as well as the realities of being back in person, led to our decision to reduce the number of companies we funded,” Amos told us. 

Amos said that batch sizes vary because “we are constantly evaluating every aspect of our batches and the environment in which the companies will be operating.”

Warnings materialized

Until recently, many venture capitalists saw themselves as immune to economic instability. Recent data points to that not being the case, and while early-stage investments of the kind that Y Combinator provides have been more resilient, VC investment is down across the board.  •  Share

What Twitter’s Move to Shutter Offices Signals for Big Tech

What Twitter’s Move to Shutter Offices Signals for Big Tech

TWITTER EXECUTIVES CAN currently travel the world by globe-trotting among the company’s 38 offices, from San Francisco, Sydney, and Seoul to New Delhi, London, and Dublin.

But not for much longer. On July 27, the company sent a memo to employees saying that one office in San Francisco would be shuttered; plans for a new office in Oakland, California, would be abandoned; and the future of seven locations was being carefully considered as part of a cost-cutting measure. Five other offices globally would definitely be downsized. It’s all part of an attempt to prepare the company for purchase by Elon Musk and tighten expenditure as much as possible.

Twitter isn’t the first to cut down its office space. In early June, Yahoo was rumored to be getting rid of its 650,000 square foot San Jose campus, which was only completed at the end of 2021. Later that month, Yelp announced it was edging closer to being fully remote, and closing 450,000 square feet of office space across the United States. It was followed a week later by Netflix, who said it plans to sublease around 180,000 square feet of property in California as part of a broader company downsizing. That echoed Salesforce, which put up half of its eponymous San Francisco tower block for subleasein mid-July.

Twitter is likely to be one of many companies making the same decision, says Daniel Ismail, senior analyst at real estate research company Green Street. “Even for technology companies, which are some of the most profitable and valuable companies in the world, the office is still an expense—and one that may not be critical in the future.”  •  Share

Tinder chief leaves dating app after less than a year

News of Renate Nyborg’s exit came as Match Group reported results that missed Wall Street expectations

The chief executive of Tinder has left the dating app after less than a year after the market value of its parent company plunged by more than a fifthfollowing reporting disappointing results.

The departure of Renate Nyborg was one of a number of management changes announced by the $20bn Match Group, which owns dating brands including Hinge, Tinder and

Continue reading…  •  Share

Trading platform Robinhood lays off nearly a quarter of staff as crypto drops

The news comes on the heels of a dire revenue report, with company shares taking a 3% tumble in extended trading

Robinhood, the trading platform that gained notoriety for allowing amateur stock investors to play the market, is laying off nearly a quarter of its staff – citing economic conditions and the crash of the cryptocurrency market.

The news it was slashing 23% of its staff came as the company posted a 44% decline in revenues on slumping trading activity, in a surprise earnings report that came one day earlier than scheduled, and sent the company’s shares down more than 3% in extended trading.

Continue reading…  •  Share

Tracking Web3

Pearson Says Blockchain Could Make It Money Every Time E-Books Change Hands

Pearson Says Blockchain Could Make It Money Every Time E-Books Change Hands

The chief executive officer of Pearson Plc, one of the world’s largest textbook publishers, said he hopes technology like non-fungible tokens and the blockchain could help the company take a cut from secondhand sales of its materials as more books go online. 

The print editions of Pearson’s titles – such as “Fundamentals of Nursing,” which sells new for £57.99 ($70.88) – can be resold several times to other students without making the London-based education group any money. As more textbooks move to digital, CEO Andy Bird wants to change that. 

“In the analogue world, a Pearson textbook was resold up to seven times, and we would only participate in the first sale,” he told reporters following the London-based company’s interim results on Monday, talking about technological opportunities for the company. 

“The move to digital helps diminish the secondary market, and technology like blockchain and NFTs allows us to participate in every sale of that particular item as it goes through its life,” by tracking the material’s unique identifier on the ledger from “owner A to owner B to owner C,” said Bird, a former Disney executive.

On Monday Pearson reported results ahead of analyst estimates, reiterated its full-year outlook, and announced it would find £100 million in cost savings. It also launched a strategic review of a Virtual Learning business called OPM.  •  Share

Messaging: the Bottleneck for Web3

Messaging has become the bottleneck for growth in web3. The lack of a native messaging protocol prevents apps from communicating with their users.

Today, web3 apps communicate with users on Discord & Telegram. But these social networks aren’t web3 native. My Telegram username isn’t linked to my wallet. Knowing a chat user is the same who bought an NFT remains elusive but important.

These communities don’t help new app developers with user awareness. So developers stuff wallets full of airdropped tokens. They hawk their wares by stuffing them into strangers’ pockets, which is problematic. These airdrops are a novel form of spam for both users & wallets.

The problem extends beyond marketing & community building. Product notifications (your NFT has a new offer), customer support (here’s how to transfer your tokens into our liquidity pool), and peer-to-peer messaging within an application (hey, friend) – none are possible today in a crypto-native way.  •  Share

Why NFT Creators Are Going cc0

Why NFT Creators Are Going cc0

by Flashrekt and Scott Duke Kominers

August 3, 2022

On January 1st each year – New Year’s Day, but also “Public Domain Day” – thousands of creative works automatically enter the public domain for the first time. This means the original creator or copyright holder loses their exclusive rights (e.g., for reproduction, adaptation, or publication), and the work in question becomes free for use by all. It happens with movies, poems, music, artworks, books – where creative protections typically last until 70 years after the life of the author – and even happens with source code in some cases.

Opening creative works to the public domain also opens the door to all manner of new uses. Earlier this year, an estimated 400,000 sound recordings from before 1923, and the well-known Winnie-the-Pooh, became public. (That’s Winnie-the-Pooh in hyphenated form – not the newer, shirt-wearing version from 1961 that’s still owned by Disney.) With most of the characters from A.A. Milne’s 1926 Winnie-the-Pooh book now public, we’re starting to see creative adaptations and expressions Milne likely never expected or intended. Indeed, the old hyphenated version of the honey-loving bear is already being adapted for a horror movie: “Winnie-the-Pooh: Blood and Honey”… with Pooh and Piglet as the villains. 

Counterintuitively relative to many classic intellectual property (IP) strategies, experimentation and recombination can sometimes grow the value of IP. This is a core dynamic of open source movements, which explicitly allow the public to build upon (or fork and duplicate) existing technology. A large part of what makes Android, Linux, and other successful open source software projects so competitive is their embrace of such permissionless innovation. Crypto’s success at attracting public development is similarly due to its general endorsement of open source, and “remix culture,” which is especially true for some NFT communities. 

Seizing the memes of production

Strategies for building brands, communities, and content through IP vary greatly across NFT projects. Some maintain more or less standard IP protections; others give just NFT owners rights to innovate upon the associated intellectual property; while still others have gone even further, choosing to completely remove copyright and other IP protections.

By issuing digital works through the “Creative Commons Zero” (“cc0”) license – a rights-waiving tool released by the Creative Commons nonprofit organization in 2009 – creators can knowingly opt for “no rights reserved.” This option allows anyone to make derivative works and profit from those efforts without fear of legal consequences. [There’s still a lot of confusion around copyrights as applied to NFTs, so nothing stated here should be considered legal, financial, tax, or investment advice – but check out this article for an overview of copyright vulnerabilities with NFTs, and how creators can take steps to ensure owners’ rights. The focus of this piece, however, is on just cc0.]

The use of cc0 for NFTs was popularized by the Nouns project, launched in summer of 2021. Many others soon followed, for example: A Common PlaceAnonymiceBlitmapChain RunnersCryptoadzCryptoTeddiesGoblintownGradisLootmfers,MirakaiShields, and Terrarium Club are all cc0 projects – and manymanymany derivatives have been created from and beyond them. 

The popular pseudonymous crypto artist XCOPY, meanwhile, placed their iconic 1-of-1 NFT artwork “Right-click and Save As Guy“ under the cc0 license in January, just one month after selling the piece. That cc0 designation has already resulted in a plethora of derivatives.  •  Share

Co-Founder Yi He To Lead Binance's $7.5B Venture Capital Arm - PR Newswire

Co-Founder Yi He To Lead Binance’s $7.5B Venture Capital Arm – PR Newswire

DUBAI, UAE, Aug. 3, 2022 /PRNewswire/ – Binance, the world’s leading blockchain ecosystem behind the largest cryptocurrency exchange, today announced the appointment of its Co-Founder Yi He as the new head of its venture capital (VC) arm and incubator, Binance Labs.

“As part of the founding team, Yi has been actively involved in Labs since its inception and has played a pivotal role in identifying early-stage projects and founders with the vision and drive to disrupt those global institutions that no longer serve society effectively,” said Binance CEO CZ (Changpeng Zhao). “This is the perfect moment for Yi to take on a larger role in Labs as this market presents an unparalleled opportunity to identify those projects with the tenacity to thrive in tough market conditions.”

Binance Labs is the largest crypto VC in the industry by Asset Under Management (AUM) with a Multiple on Invested Capital (MOIC) of 21.0x, a performance metric that is unmatched in the industry. Binance Labs manages total assets of $7.5 billion, consisting of more than 200 portfolio projects.  •  Share

The Crunchbase Web3 Tracker

The Crunchbase Web3 Tracker

A few examples of Web3 companies in the U.S. include Alchemy, a developer platform that helps companies build reliable decentralized applications; Polygon, a platform for Ethereum scaling and infrastructure development; and Chainlink, a startup that’s focused on making it easier for traditional data sources, such as APIs, to connect with blockchain technology. While Web3 isn’t a technology, there have been innovations created based on what the concept represents: a decentralized internet.  •  Share

Crunchbase’s Web3 Tracker: Follow The Startups, Investors And Tech Powering The Next Generation Of The Internet

Crunchbase’s Web3 Tracker: Follow The Startups, Investors And Tech Powering The Next Generation Of The Internet

Crunchbase News is launching Crunchbase’s Web3 Tracker, a new site to look at startups, investors and funding news concerning all aspects of Web3, cryptocurrencies and blockchain.  •  Share

Startup of the Week

Meta Platforms Teams With Coinbase And Dapper Labs For NFTs On Instagram: Here Are The Details - Benzinga

Meta Platforms Teams With Coinbase And Dapper Labs For NFTs On Instagram: Here Are The Details

Meta Platforms (NASDAQ: META), the parent company of Facebook and Instagram, is updating plans for its launch of non-fungible tokens (NFTs).  •  Share

Coinbase will give BlackRock clients access to bitcoin

Coinbase will give BlackRock clients access to bitcoin

Coinbase said Thursday that it has partnered with BlackRock to give the world’s biggest asset manager’s clients access to bitcoin and other cryptocurrencies.

The news sent Coinbase shares rallying more than 15% as a partnership with a major Wall Street institution eased investor worries about heightened regulatory scrutiny of the crypto marketplace. Coinbase will provide clients of BlackRock’s Aladdin software “direct access to crypto, starting with bitcoin,” Coinbase executives Brett Tejpaul and Greg Tusar said in a blog post.

The marketplace will offer access to crypto assets through Coinbase Prime, which will provide “crypto trading, custody, prime brokerage, and reporting capabilities to Aladdin’s Institutional client base who are also clients of Coinbase,” the executives said.

It’s a big win for Coinbase at a time when the crypto powerhouse is facing growing pressure from the SEC. The regulator recently charged a former Coinbase product manager with insider trading arguing that many of the assets offered on the platform should be regulated as securities. The SEC is also reportedly probing the crypto marketplace for possible violations of securities laws.  •  Share

Tweet of the Week