As I said before, I could never see much profit margin in Substack. Its tech was basically a combination of three things, an email exploder, some web hosting and payment processing. The big advantage that it had was being first to the mass market with a paid newsletter service, and having all the big names on its platform.
But it was always going to end up in this situation. Take too much of a cut, and people will easily set up their own service and undercut you- so the only way to justify a huge valuation was to grow massively and quickly. They could have been a big success and moderately profitable, but the relentless logic of capitalism has pushed them into chasing absurd numbers now now now until the VC money runs out. How very 1999.
