Wednesday, January 27, 2021

Substack: Most Interesting Consumer Startups of 2021 (Part 2)

This post is the first in a small series on the new wave of hyperinteresting consumer tech products that are most likely to have had society-level impact in 5 years. My first two posts are on Clubhouse and Substack [1]. Both are social network and media platforms of different types, and both have an opportunity to displace multiple existing services including Twitter. This post on Substack focuses on the creation of journalist-entrepreneurs[2] and the transition of the media world (at least in part) back to subscriptions. Another post on Clubhouse explains why it is the first new interesting social platform in a decade.


The other potentially transformative company of this era is Substack. Substack is changing the nature of journalism, reporting, blogging, podcasting, and content creation. Strikingly, it is turning a generation of content creators and journalists into business owners.

The news industry has had a tough two decades. The emergence of online channels and online advertising in the 1990s and 2000s disrupted the news industry in the following ways:

  • New channels to reach users/readers. Newspapers used to have local monopolies or oligopolies. This was changed by the Internet, where it was suddenly easy to use any news source from any geography. Later, social networks like Twitter and Facebook built massive audiences and drove more news distribution and interaction.

  • A change in cost structure. Newspapers & magazines had enormous costs associated with printing presses and the physical production and distribution of their content. Digital media emerged without these baked in costs, while large incumbent brands like the NY Times and Washington Post could suddenly broaden their reach. This squeezed traditional mid-tier media with its physical infrastructure and (for niche or local brands) more limited reach.

  • ROI-based advertising. Local news made a large portion of its profits off classified ads. Craigslist disrupted the classified model, while online ad spend became more ROI focused with the emergence of Google. Newspapers suddenly had to compete for advertising spend with large technology platforms when before they had local monopolies or oligopolies.

These changes caused major shifts in the economics of the news business and led to the destruction of many local news outlets, cuts in journalism staff, and a decrease in options for talented writers. The disruption of traditional media led to (a) consolidation of media behind a few major brands (b) bankruptcy for many small, local news outlets (c) the morphing of individual journalist political views farther left on economic issues. The livelihood of journalists was being hurt by technology platforms and social media, and may explain part of the journalistic backlash against these platforms in recent years.

Substack allows anyone to:

  • Easily create and publish content.

  • Build a subscriber base.

    • Convert Twitter or other followers into regular subscribers and readers by building a direct channel outside of Twitter or other social media gatekeepers. It also allows for targeted niche writing.

  • Monetize that subscriber base by charging a monthly or annual fee.

    • This is key. A subset of journalists can make 2X-20X more on substack than at their old job. This has a few important implications below (see “Journalists Entrepreneurs” below.).

    • The media platforms lose leverage over journalists. In the land of few jobs and few media brands, an individual journalist or writer needs to comply with the whims of its management and fear colleagues opinions and politics. If there is a ready outlet for individuals like Substack, they are not constrained in their industry. Like all entrepreneurial endeavors, this will not be for everyone. Media brands will continue to thrive, but we will also see a blossoming of individual brands and niche publications that are self sustaining.

Substack uses cases may include:

  • General purpose blogging platform and newsletter distribution. Subscriptions are key. 

    • The blogging/newsletter comments are self explanatory and opens up a wide variety of use cases from consumer to enterprise. 

    • By monetizing initially via a subscription-model Substack avoids some of the conundrums many content platforms face early on. It also creates a direct financial incentive for writers on the platform to build their userbase and readership by giving them revenue tied directly to usage. Ads based models are less able to incentivize content providers directly, nor do they create an entirely new media business model like Substack does.

  • Content platform and new media outlet. This is the product direction Substack is getting most of its attention for now. As journalists and writers leave traditional media, it appears they are largely going to Substack (and to some extent Ghost). There have also been interesting group migrations to Substack where people are inventing new media outlets and groups on the platform with multiple writers at once. This does not mean traditional media is "over" - it will of course continue to thrive. However many brands may now also grow and flourish on Substack.

  • Local news outlets. One of the challenges of local news was its cost structure. Each paper needed to physically produce papers, sell inventory to advertisers, and distribute. This was monetized in part by classifieds, which CraigsList disrupted. Substack allows overhead to be cut substantially and a small number of local journalists can thrive on this direct pay platform. It will be interesting to watch if Substack allows for the flourishing of a new wave of local journalism, supported by subscriptions from a small, happy to pay audience.

  • Investigative journalism for everything. Substack allows the re-emergence of investigative journalism for almost any topic that has a userbase willing to pay a subscription for it. Do you want detailed updates on the Chinese government? The Keystone Pipeline? Climate change? The move of tech to other cities? Substack creates a way for writers to monetize insights directly.

  • Distributed content about everything. Will the next music magazine, fly fishing journal, or SlaterStarCodex live on Substack?

  • Serialized novels. Charles Dickens used to write his novels as serial installments of roughly twenty, 32-page installments per novel. One can imagine a world where novelists are paid a subscription to continue to share novels or other longer form content as they go.

  • From front-page to inbox. From mainstream to niche. While the old paradigm of journalism was “get on the front page”, Substack is an interesting move towards “get in the inbox”. Society is moving from public to private content and mainstream to new fragmented niches. Part of this shift is driven by a fear of cancel culture, which appears to be evident in the newsrooms for a subset of journalists who shifted to Substack. Why deal with irate colleagues or a Twitter mob in public when you can be read quietly in private?

  • Enterprise use cases. They are a number of obvious use cases for marketers to use Substack as a writing/blogging and newsletter platform.

  • Subscriptions payment platform. Substack has built subscription payments for media. This can be extended for other influencer and content types and would be an interesting adjacency to enter.

  • Long term: Twitter replacement? Like Clubhouse, Substack may have a shot at displacing Twitter for some of its use cases. 

    • Substack has a news and interest graph and content subscriber model. Substack’s broadcast based interest graph provides it some hooks on which to build a broader real time content platform on. 

    • Assuming users can increasingly comment and interact with Substack content and each other, a nascent Twitter-like short form content product can start to impact the news and interest-graph side of Twitter.

    • Twitter recently bought Revue as a reaction in part to Substack. Intriguingly many journalists are on Substack in part due to cancel culture and censorship. Given Twitter’s increasing censorship, erm I mean, "content moderation", of scientific and political content, it will be interesting to see the trade off between censorship and distribution reach. I would guess distribution helps overcome a lot of other considerations & Twitter's new product has a chance to do well with much of the mainstream.


One of the most interesting societal transformations driven by Substack is converting a generation of journalists into small (and in some cases large) business owners. During the last two decades, journalists have suffered from the “creative destruction” aspects of capitalism - where the business model of their platforms were hurt and many journalists were laid off. This and other trends pushed journalists farther to the left on economic and other issues.

With the rise of Substack, journalists are suddenly benefiting from becoming the owners of their own media brands and businesses. In many cases they are making more money while maintaining editorial control of their own perspective and voice. Writers on Substack need to do all the things business owners need to do - attract customers, in some cases hire people and manage them, and run expenses - but also benefit financially from the upside of their work. It will be interesting to see how this adoption of direct business ownership shapes the writing and thinking of a generation of writers - and might end up being one of the biggest societal impacts of Substack. The financial reenfranchisement of the Fourth Estate may also shift the thinking of a society which consumes their content.

Thanks to Avichal Garg and Katherine Boyle for comments on this post.


[1] Of course there will be some other product in private alpha that in hindsight will be super important too. Only the future knows what it is.

[2] This is all my own speculation and has nothing to do with actual company roadmaps.



Startup life:

Clubhouse: Most Interesting Consumer Startups of 2021 (Part 1)

This post is the first in a small series on the new wave of hyperinteresting consumer tech products that are most likely to have had society-level impact in 5 years. My first two posts are on Clubhouse and Substack [1]. Both are social network and media platforms of different types, and both have an opportunity to displace multiple existing services including Twitter. This post will cover why I think Clubhouse is the first new interesting social platform in a decade. The post on Substack focuses on the creation of journalist-entrepreneurs[2] and the transition of the media world (at least in part) back to subscriptions.

Clubhouse: the voice platform and social network

Clubhouse is the first new interesting social network in almost a decade. While TikTok has reached massive scale, it lacks the potential for societal transformation. 

Clubhouse has interesting organic behavior emerging on it that suggests multiple paths forward. Whether it capitalizes on these or not comes down to vision and execution. Twitter missed capturing a lot of its organic behavior (for example small business CRM use cases, long form content, messaging via DMs etc.) so it is not a done deal for Clubhouse yet either. Execution & product vision matter to the eventual impact had.

Clubhouse uses may include:

  • Replacing talk (and other forms?) of radio. This is the dominant current use case. Between relationship talk-rooms to tech discussions, Clubhouse lets any group of users have participatory conversations on any topic. Many users seem to put Clubhouse on in the background as a form of low impact audio and chatter.

  • Podcasting & asynchronous audio. If you let participants opt-in to being recorded, and then allow for public posts, Clubhouse becomes a podcasting platform and network with its own distribution. This bridges live and asynchronous content and broadens the use case and impact of Clubhouse out of real time only content. This shift may be important creating an evergreen versus solely ephemeral content corpus.

  • Live shows. When I was working on mobile at Google in 2004, there were a lot of obvious mobile uses cases that would be replaced by apps - Whatsapp, Instagram and others were “expected” products. There were also a number of products I never would have a priori guessed like Uber (a stranger will show up in their car and pick you up). These products then seem obvious in hindsight. Live audio shows or broadcasts are one of these - for example, the Lion King musical was performed on Clubhouse recently. One could imagine DJ streams or other audio shared via Clubhouse as their userbase grows.

  • Panels, events, meetups, and meetings. A number of panels for the JP Morgan annual healthcare conference occurred on Clubhouse this year. While this may be a sign of COVID shelter in place, there is a big use case for virtual meetings without heavyweight video and desktops. Clubhouse may be the equivalent of audio subreddits - big rooms are performance art and small rooms with deep connections and content being produced.

  • Network extension and serendipity. Clubhouse creates voice-based serendipity in way Twitter created text-based new friendships and interactions. By joining a room where people you know (and do not know) are talking, you can talk to and get to know new people. If direct messaging is added, new unexpected connections can be formed.

  • Direct messaging. It will be interesting to see if Clubhouse adds a “DM” feature with either text (seems a no-brainer?) and/or audio (Seems less interesting? Next-gen voicemail? Does anyone use voicemail?) that will further strengthen weak social or interest-based ties. A lot of serendipity and friendships on Twitter emerged out of DMs and one could argue Twitter should have created a massive messaging app and network.

  • Group voice calls. Just as Twitter is used for public broadcast as well as smaller groups of teenagers, Clubhouse could become a replacement for group voice. 

  • Long term: Twitter replacement? Clubhouse is one of two companies (alongside Substack) with a solid opportunity to displace Twitter. Clubhouse has:

    • An emerging social graph and interest graph that is the most Twitter-like of all the products I have seen in years.

    • Celebrity traction. Everyone from Perez Hilton to Oprah have participated in Clubhouse in one form or another. Right now most of the celebrities active on the platform are minor ones, but that could clearly morph.

    • A content unit Twitter can not compete with. If Clubhouse allows production of consistent audio clips, and commenting/interactions on those clips with texts and images it starts to create a scaffold on which to bootstrap a major part of Twitter activity. Especially given the emerging social & interest graph, and if DMs are added, Clubhouse has a shot at building a Twitter competitor over time.

Clubhouse is less than a year old (although both founders have been thinking about social for a decade) so it is still early days. However the company is off to an exciting start. My hope is 5 years from now we look back to see a company that has transformed major uses cases for society.

Thanks to Avichal Garg and Katherine Boyle for comments on this post.


[1] Of course there will be some other product in private alpha that in hindsight will be super important too. Only the future knows what it is.

[2] This is all my own speculation and has nothing to do with actual company roadmaps.



Startup life:

Thursday, January 14, 2021

Why Has Israel Succeeded At COVID Vaccination?

Israel has pulled ahead of much in the world in its rate of vaccinating its citizens - with roughly 1% of the entire population vaccinated per day and over 23% of the country vaccinated in the first few weeks. The country hopes to have the entire population over age 16 vaccinated for COVID by end of March.

Israel focused on first vaccinating people by age group (and then comorbidity) with the idea that if you vaccinate the 20% of the country that represent 95% of the deaths, you can avoid deaths from COVID.

% of Israeli population within a certain age vaccinated by 1/13/21. Chart via Segal Eran

Early data is starting to suggest Israel’s approach is working. For example, in a cohort of 200,000 people vaccinated in Israel, there was a 12X drop in COVID cases by day15-22 of a single dose of Pfizer/BioNTech vaccine.

The right hand column below is day since first shot to result. The left hand side is # positive for COVID.

In parallel much of the rest of the world has been slower on rolling out vaccination with UAE as an exception. 

After speaking to a number of members of the Israeli public health community involved with COVID, the following picture emerges on why Israel has been so successful:

1. Focus on simplicity & pragmatism. 

The biggest takeaway is a focus on simplicity and pragmatism. For example, the criteria for vaccination are simple - you are either a healthcare worker (including nursing homes & assisted living facilities), or you are tiered by age (and later comorbidity). 

Healthcare workers have been shown to spread COVID and other diseases within hospitals (known as “nosocomial transmission” and a key aspect of SARS and MERS - two other coronavirus based diseases), while older people are most vulnerable to hospitalization and death from COVID.

Having age-based tiers makes it easy to know who should show up and who is eligible, and removes a big burden on enforcement. 

This simplicity and pragmatism extends further. For example, in the USA the roll out of vaccination in California to healthcare workers was slowed by complex tiering within healthcare workers themselves based on how much patient facing time each type of workers has.

In contrast, the Israelis I spoke to said “We vaccinate an entire workplace. We assume everyone will eventually be vaccinated so we found it easier to just show up and vaccinate every single person who works at a hospital. We do not care if they are doctors or administrators or whatever - it is easier to just vaccinate everyone”. 

Many countries and states have been too focused on “fairness” and “equity” so have frozen their vaccination efforts in place, or put in place large fines for “misused virus”. Remember - everyone will eventually get vaccinated. The more shots in arms, the better, with an emphasis on the old and comorbid. And also remember, we are in the middle of a “once in a century pandemic”- it is more important to move fast to save lives than to create and enforce complex rules. However, it turns out these complex rules are not needed - there are simple criteria for who will get sick and die of COVID per below.

2. Vaccinate the people who will die.

The biggest risk factor for death and hospitalization from COVID is age. Age outweighs comorbidities in some cases by as much as 30-fold. A handful of comorbidities matter, but age dominates.

Simple math suggests that vaccinating roughly 20-25% of the population would prevent 95% of COVID deaths in many western countries. So, pragmatically, the Israelis focused on vaccinating that high-risk 20% of their population first. This has mapped to age-based tiers (and a handful of comorbidities) which simplify vaccination roll outs. They also vaccinated healthcare workers and long term care facilities first.

Many of the calls in the US for “ethics and equity” in vaccination seem to be politically motivated versus science based. Complex, multi-tier criteria that prioritize young “essential” workers over 70-year olds, who are much higher risk of dying of COVID, means more people will die as we wait to get to the 20-25% of the population who actually matter in terms of risk of hospitalization and death. There is little logic in vaccinating 30-50% of the population (depending on your definition of "essential workers") and then 20% of high risk people (50-70% of the entire population between them!!) to protect 20% of the population who contribute 95% of COVID deaths. It is much easier to focus on the 20-25% who are actually at risk first. It seems unlikely it is ethical, or equitable, to let people die for your “ethics & equity framework”.

The science is clear - vaccinate the elderly, then people aged 16+ with certain comorbidities and you will see COVID deaths plummet. (Side note, the CDC finally updated their criteria to 65+ while this document was being written). We should all honor the role essential workers have played in keeping the country and world open. One way to honor this is to protect their elderly and sick family members from dying of COVID - by vaccinating their at-risk family members first. After the people with highest risk of death are vaccinated, the subset of essential workers who did not fall under those demographics can be vaccinated next. For example, Israel started this week vaccinating 55-year olds and up, as well as all teachers.

The nice aspect of this approach is you do not need to vaccinate that large of a population before you see a big impact and can potentially reopen. If fewer people will die of COVID (once vaccinated) then other common diseases like flu going forward, a country or state can reopen with many lives saved.

Here is Israel’s prediction on what to expect in terms of deaths:

3. Create as many endpoints to vaccinate out of as possible.

The Israelis I spoke to emphasized their focus on opening as many vaccination clinics and centers as possible. They mentioned that when a hospital set up a vaccination program, every possible clinic in the hospital was also opened for vaccination.

Similarly, parks, schools, and other public spaces have been converted into places people can go to be vaccinated.

Israel has also opened some “mega centers” for vaccination, per the picture below.

Some cities like San Diego have recently followed suit after feeling stymied by State and Federal government:

4. Don’t waste vaccine.

Remember, everyone will eventually be vaccinated. Throwing a scarce vaccine in the trash is an enormous waste. Rather than waste vaccines, the Israelis have two mechanisms for overflow. First, anyone can wait in line by a vaccination center starting at 7pm and if there is vaccine left over, be vaccinated. Second, if no one is waiting in line nurses or other vaccinators will go out into the street looking for people to vaccinate (and then schedule their next appointment for the second dose on the spot). There is a famous story of nurses coming out of a clinic and spotting a pizza delivery person. “Hey pizza guy want a vaccine!!” they yelled to call him over and then vaccinated him.

5. Success begets success.

Israel has been incredibly transparent on data around the vaccination program - with everything from dashboards showing vaccines used per day, % of population by age vaccinated etc. to a Telegram channel from the Ministry of Health with daily data dumps to whomever signs up.

One general tenet of life is “success begets success”. By vaccinating rapidly the pharma companies approved in Israel (Pfizer and Moderna) have continued to prioritize the company for more vaccine as capacity comes online. While Israel originally expected a gap in deliveries and temporarily running out of vaccine in January, that gap has now been bridged via new pharma deals.

The US could consider doing something similar - allocate more vaccines to the states that are actually using it. Hold back vaccine from states that are not moving quickly until they move fast enough to use it.

Remember - we do not need to vaccinate everyone to have a big effect. If we vaccinate 20% of the population it might be possible to still drop deaths 95%, which is the primary goal of the COVID shelter-in-place, social distancing, and vaccination efforts.

Factors that are mentioned but seem overweighted (AKA excuses).

There are a lot of reasons (perhaps a better word is “excuses”) that are made for why Israel is succeeding while others are not. This includes things like:

a. Small population and geography. 

Israel is a country of 9 million people. The argument is its small size makes it easier to vaccinate. The reality is that many countries the same size or half the size of Israel are doing a much worse job of vaccinating their populations including Denmark (5 million), Norway (5.3 million), Netherlands (18 million) and others. Similarly, States like New Jersey (population of ~9 million) are far behind Israel as well. If size were the only constraint, we would see more success elsewhere.

b. HMO/healthcare centralization.

The Israeli population is largely covered by 4 HMOs - with the largest, Clalit, covering roughly 50% of the population. Centralization of healthcare services undoubtedly matters in decision making speed and administration. However, as reminder the fragmented US system vaccinates 50% of its entire population age 2 and up for flu every single year - and does so in a matter of weeks. The primary obstacles in the US seem to have less to do with centralization and more with complex criteria and fears of scarcity of vaccines driving even more scarcity.

c . It must be the Israeli military coordinating all this!

The Israeli military is not coordinating the population’s vaccination. It is driven by a combination of the Ministry of Health, the HMOs, and some private companies that have been contracted for a subset of the logistics. This is all do-able in the USA too.

d. Israel is a wealthy country! That must be why! Or they spend more on healthcare!

Israel GDP per person is lower than the USA overall as well as lower than states of the same size like New Jersey. The country also spends around 7% of GDP annually on healthcare - roughly one-third what the USA spends.

e. The culture is different!

Israel has more in common with the US than one might guess. There is a fractured, contentious political system. A number of healthcare workers were going to refuse the vaccine - until they were told they would be placed on administrative leave if they refused it. A meaningful subset of the population ignored their second lockdown.

The USA can do it too!

Every year the United States vaccinates 50% of its entire population over the course of a few weeks for the flu. In past outbreaks the country has also been fast to move. For example, in 1947 the city of New York vaccinated 5 million people in 2 weeks to combat a smallpox outbreak.

If needed, the country can move fast. In order to do so, it should:

(1) Simplify criteria. Make vaccination age-based (and include healthcare workers and assisted living facilities). Be pragmatic. Vaccinate the whole hospital versus quibbling on the order in which staff get it. Remember - everyone will eventually be vaccinated. The two goals are to stop deaths and then to build herd immunity - in that order.

(2) Focus on the people who will actually die of COVID, not politics. 20-25% of the population vaccinated may drop deaths 95%. The CDC is finally moving in this direction, but should focus on age-based and then co-morbidity based tiering versus other factors. “Fairness” falls out naturally if everyone is vaccinated in the next few months and everyone’s family members’ lives are saved, versus taking an entire year with incremental disease and deaths.

(3) Open as many vaccination points as possible as fast as possible

A simple model is that anywhere that administered the flu vaccine can be used to vaccinate for COVID. Or, augment the pop-up testing centers with vaccination services. These stations can be staffed by healthcare workers from the clinics being used, as well as pharmacists (trained in flu vaccination), dentists and others.

(4) Don’t waste vaccine. If there is excess left over, use it on anyone so we can build herd immunity faster. 

(5) Optional - reward success. If a city,region, or state moves extra fast at vaccination - give them more. Reward the communities that vaccinate quickly and create competition and a leaderboard to get it done.

We finally have a vaccine. Many people are now dying unnecessarily due to a lack of delivery. The Israel model suggests a clear way to move forward. Let’s get it done.