16 November 2021 |

Week of 11/16/2021: Perpetual’s Perspective

By Adam Ryan

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Substack hit 1M subscribers

If you don’t already know…

Substack announced that they have more than 1M subscribers on their blog. The top 10 publications collectively bring in more than $20 million a year. They announced a master plan to continue to support creators with audio, video, and community. They will provide services they need to do their best work like editing and design. They will build a discovery network to help their writers cross promote and collab.

Perpetual’s perspective…

This is a great milestone for Substack. In the Gates essay I mentioned earlier he projected there was only $20-$30M in subscriptions universally online in 1996. Substack didn’t provide revenue numbers, but if you assume $100 ARP/subscriber they are at GMV of $100M, with revenue at $10M. I don’t know if that’s right, but if it’s close – it’s shocking how huge of an impact Substack has had in media, with such a small amount of actual revenue. The good news for Substack is if they use their wedge and brand equity to build new tools for creators they could soon start to reach their aspirations of being a $1B+ ecosystem.

The constitution is getting bought by a DAO  

If you don’t already know…

A few thousand people are trying to buy the Constitution (I’m one of them). The ConstitutionDAO expects to place a winning bid at an auction this week for an original copy of the U.S. Constitution. The document is only 1 of 11 left and the sale price will be $15-20M. At the time of writing, this project has been live for 6 days and has raised over $3M.

Perpetual’s perspective…

This crazy movement helped me shift my views of DAOs. DAOs will replace the VC money that goes straight to Facebook. Consumer industries that require mass amounts of capital to hit scale will use grassroots marketing (via ownership in a DAO) to achieve their desired outcomes. If you give up 20% of your equity for a few million in VC funding that you’re going to transfer to Facebook over the next 12 months, why not give your customers 10% of your equity for them to be an advocate instead? This constitution thing has a ton of risks and odd angles, but it shows the power of grassroots/bottoms up marketing. 

Punchbowl does $10M this year

If you don’t already know…

Punchbowl News has attracted more than 100,000 subscribers since it launched in January. It raised $1 million from investors including LionTree’s Kindred Media—is on pace to generate more than $10 million in revenue this year, between ads and subscription. The company only has 8 employees. 

Perpetual’s perspective…

Wow. What execution by the Punchbowl team. Hats off to them. The former Politico execs understood how to execute with advocacy advertising (see Axios) and captured the market quickly. Politico may be the Paypal Mafia of media with numerous former execs launching and building successful companies. As for Punchbowl, I think the question will be renewals and how next year will look for the experienced team. Not saying they’re the same, but we saw with Quibi that large upfront deals can be negotiated with relationships – but executing that can bring another range of challenges.