Your first lesson in an economics course is on how supply and demand curves are supposed to behave. This conversation assumes a lot about how markets really work, and raises an interesting question on whether or not Substack is a real market.
A real market would be something like kanga bangas, or Kangaroo1 sausages.
When the producers and consumers of kanga bangas come together in the kanga banga market, the suppliers announce that they brought six kanga bangas and they want $9 for each one (actually…that’s a $6, since everything’s upside down in Australia). The kanga banga consumers tell the kanga banga producers they are crazy to charge this much for a kanga banga, but one consumer says he’ll pay $5. One kanga banga producer rushes to sell his at $5.
Next, two consumers will pay $4 and not a penny more, to which two kanga banga distributors say “good on you, mate!” and sell their kanga bangas.
Three consumers are staring down the three producers as the remaining kanga bangas start to sweat in the heat of the kanga banga market. “Two dollars,” the consumers demand.
“Yeah nah, three,” the kanga banga producers push back.
As the consumers stomachs growl, they say “nah yeah,” and take the kanga bangas at $3 and POOF! the market clears where all buyers and sellers have what they want.
Your first week of economics is understanding examples like this to show how a demand and supply curve are expected to behave. All else equal, demand for a good goes up as prices go down (an inverse relationship), while supply increases as prices go up. An economics professor would walk through price and quantity, supply and demand, and use a similar example to something like my kanga banga example.
There are, however, some goods that do not play by these rules of supply and demand. The example most relevant to us on Substack is the Veblen good.
If you’re unfamiliar with the term, you are likely familiar with some common Veblen goods: private jets, fancy cars, exclusive watches, and the like.
An example of a Veblen good. Unlike kanga bangas, demand increases with price.
Veblen goods are desirable because of their high price. These are usually status symbols that provide a degree of functionality and quality that may be similar to items priced much lower. Half of the fun of a Veblen good is the exclusivity and rarity of an item. It is as much about the emotions around owning and experiencing the product, and the satisfaction that comes from knowing others cannot, that defines a Veblen good.
Just about anyone can afford a nut milk latte, a side of avocado, or stand in line for the latest SUPREME shirt, but what can’t be bought is good taste.
I present to you my Substack as a solution. You can subscribe to me to demonstrate you have good taste. Pull up your phone at Teterboro, and all of your friends will see my Substack open on your phone as if it were a Bored Ape. You can feel the same satisfying feeling of owning that penthouse with the dream view or that rainbow Daytona watch from paying me more money for my Substack.
Do not let the fact that an algorithm brought you here convince you this is a cheap offering. I am a very expensive person. The algorithm is built by people who are very expensive. This essay itself was crafted over expensive tea in the same building as an oriental rug. And you, dear reader, can already sense how expensive this moment was to create for you. Reading my Substack has the feel of watching a sunset from a yacht, winding a Patek Phillipe watch, or drinking 2009 Château Lafite Rothschild with Chips Ahoy cookies…if you know you know, and you know.
And you know, obviously. Rolls Royce is quite gauche these days. You are here and you want your neighbors to see you here. Like how reading the Financial Times with its loud pink papers tells the world this is a serious person reading serious things, you too are a serious person reading serious things. And like a serious person, you want the world to know you have arrived.
So with that, I will be taking the advice of my colleague
and charge you money for the privilege of access to my Substack. I don’t think you want to read my Substack for $0, but I bet more will want to read it when we all agree that it is worth each of you paying me $100 each.You can subscribe now at the following options on an ongoing basis, but I will just take your money now:
- Option 0: Subscribe for $8 a month, I guess.
-Option 1: subscribe now as a lifetime member for $100
-Option 2: subscribe now as a lifetime membership you can pass onto future generations for $10,0002
-Option 3: subscribe at your own price at this website
And why shouldn’t I be charging higher prices? Where else can you flip through your phone in the cigar section of the Business Class Lounge in Dubai and get commentary about kanga bangas, Veblen goods, and see a watch on a backgammon board?
It doesn’t exist.
Where else are you reading good fiction and thoughtful commentary on risk management, technology, or fatherhood?
Nowhere.
And the truth is this level of commentary is worth your money. And it’s not that I need your money as much as I want to show that by charging more for my writing that Substacks are more like Rolexes than kanga bangas. I also want your money.
And if you want to grow your own Substack, realize this point. The more you charge, the more people see your value, the more they will flock to Subscribe. Charge $10,000. Your market is out there.
I’ll see you at the top, sport.
If eating kangaroos is upsetting, know they are delicious and require population control.
Published for the upcoming STSC with the prompt “Growth.”