Medium newsletters are out, but we are still in conflict

Today is a great day: I am starting to write again.

As a consequence, I get confronted with the choice of which publishing platform to use: Medium, that I have always used and loved, or Substack.

Going through the list of features introduced by the two tools I could not stop myself from analysing the rationale behind their product strategies.

So I have asked myself:

“Can I understand a company direction by simply looking at its product actions?”

This is what I am doing here: conducting a bottom-up analysis of the product actions of the two publishing tools to come up with business strategy insights.

Hopefully this can provoke some reactions and help us product people to bridge the gap between product and business strategy.

The context

I have been writing on Medium since its very start, in 2014.

I have always loved Medium as a publishing platform for its clean interface, the possibility to connect with followers and, especially, to easily find new readers.

In the last few years, our interest as writer and publishing platform have progressively diverged. Medium struggled to find a viable business model, so it introduced paywelled articles, only accessible to readers willing to pay a subscription to the platform.

To incentivise writers to publish under paywall, Medium started to reduce the visibility of articles published by “free” writers, making more difficult for them to find new readers (which was one of the main arguments to join Medium in the first place).

The new Medium business strategy

However, the Medium business strategy has finally changed.

Under the pressure of Substack, younger publishing platform that promises writers to easily build an audience of email subscribers, Medium is adapting and evolving. Why? To avoid writers to escape to competing tools.

Indeed, Medium has recently carried out the following actions:

1. Changed its distribution system, stopping to penalise “free” writers
2. Removed a lot of banners that were making the experience of readers without an account very poor
3. Launched the email newsletter feature

This last point is the most important.

Indeed, subscribers are arguably a writer most valued currency.

And Substack knows it very well, and created a user experience totally focused on making it easy for writers to collect precious reader emails.

Up to this moment, Medium had no interest to introduce newsletters.

It pursued a closed platform strategy, based on keeping readers within the Medium platform and pushing them to create an account, so that it could monetise them in the future via paid Medium subscriptions.

A paid Medium subscriber is able to access exclusive content from a number of different authors that publish under paywall. This, to some extent, meant commoditising writers at the expense of the publishing platform.

But now, apparently, things have changed and today I was very excited to try Medium newsletters and see how they compare to Substack. And I must say I end up being a bit disappointed.

The product: Medium vs Substack newsletter

I jumped on my Medium settings and added a newsletter to my publication. Finally I had an incentive to keep writing on Medium, the platform I have always loved, and gather subscribers.

And here comes the first disappointment.

Below you can see how my publication looks like on Medium.

I have felt that something was missing and for some reason I was not fully satisfied. I have then decided to look at my publication on Substack. And I got all my replies.

Let’s have a look at the product differences:

• Primary call to action (CTA): for both Medium and Substack is “Subscribe”. No differences for now. All good
• Secondary CTA: here you can see some diversities. On Medium the secondary CTA is “Get started”, placed on a (quite visible) button inviting a user to create an account on the platform. On Substack, the secondary CTA is “Login”, on a white background and with limited prominence
• Other elements: in Medium there is no any obvious way for the reader to go to the publication page and read some articles before deciding to subscribe, while this option is available on Substack. Just a usability issue, that I am sure Medium will fix later on, so I would not place much emphasis on this

However, what is important is the difference in the secondary CTA: it seems like Medium wants to push readers to create an account, while Substack is less interested.

This seemingly minor detail capture my interest, so I decideed to dig deeper and have a look at the same article published on both platforms.

The core action = the business strategy

This is one of my articles as it appears on Medium, after switching the newsletter setting on.

And this is the same article, published on Substack.

Let’s again have a look at the differences, this time focusing only on the primary CTA:

• Medium: here the primary CTA is, surprisingly, “Get started”. Despite readers can now subscribe to my newsletter (using a banner at the very end of the post) there is no mention about this possibility above the fold. Apparently, Medium has no interest in incentivising this behaviour from users
• Substack: here the primary CTA is still “Subscribe”. In this case we have a perfect alignment between my interest as a writer (to gain an email following) and Substack interest as a platform (that will monetise later on, in case I will launch a paid version of my newsletter — more on this later). We both want the same thing: that I collect more and more emails from my readers

So now it is clear: the differences in the product are in reality differences in business strategy.

Medium vs Substack business strategy

This is the case for Medium:

Medium has a monetisation model focused on paid subscriptions for readers.

The subscription works as follows: readers subscribe to the Medium platform to access the paywalled articles of all “premium” authors. Hence, Medium has the interest in pushing new users to become registered, so that it can later on profit from their conversion.

Medium is launching newsletters with the mere purpose matching Substack features and stop writers from running away. At the same time, it is not really pushing the feature visibility, neither on the article page nor on the publication page.

And the reason is that the Medium business strategy is not aligned with with the writer interests. Until this problem is solved at the strategic level, it will be difficult for Medium to become a good tool to collect email subscribers.

Let’s now have a look at Substack:

Substack has a monetisation model focused on taking a share of the paid subscriptions of individual writers.

The subscription works as follows: readers subscribe to the writers they like, and pay a separate subscription for each of them in case they launch a paid version of the newsletter (mine is free, no worries ;). Hence Substack has the interest in users becoming email subscribers of individual writers, so that it can later on monetise them.

The platform and writer interest here are perfectly aligned: Substack wants writers to build a following and publish more and more, so that, when they will eventually launch a paid newsletter, it will profit from each of their paid subscribers. In short, the success comes together.

Strategy and incentive alignment

In short, here we can see an evident case of misalignment between Medium product and business strategy and the writer interest.

The writer would benefit from a more prominent visibility of the “Subscribe” CTA in the product, while Medium have no incentive in doing it. The interests go in opposite direction: the best strategy for Medium is not the best for the writer.

Launching the newsletter product has not been enough: Medium should indeed rethink its business (and monetisation) strategy, and align the product accordingly, to avoid writers to escape to Substack.

And hopefully it will, for the benefit of readers, writers and Medium itself.

Until that happens, I will keep writing on Substack!

Conclusions and speak soon

In this article I have focused on Medium and shared my findings on the company business strategy starting from the analysis of its product actions, and on the relevance of internal and external alignemt.

In short, these are some core insights:

• A company product strategy is a declination of its business strategy
• Business strategy adapts over time, under competitive pressure, and product strategy should follow
• The alignment of interest between the company as distributor (Medium) and its suppliers (writers) is key in the long run and generates strategic trade-offs

Business strategy is a key knowledge area for product people.

I hope this article can help to raise awareness of the relevance of the topic, and generate discussions that can help all of all of us to bridge the gap between product and business strategy.

If you have found this interesting, please share it with your friends and coworkers. And do not hesitate to comment: this article is just conversation started ;)

And have a good (aligned) journey,
— Livio

18/10/2020