Reviewing Medium’s 10-year history and exploring the future of the “Creator Economy”

After 10 years of founding Medium, Ev Williams resigned as CEO of the company.

Reactions from experts to the news ranged from mute to critical. Medium has been portrayed badly in the media over the past decade, as the company repeatedly changed its strategy, often affecting its employees and users.

We may have seen the culmination of this narrative this week:

Casey Newton, who says “Ev Williams gives up”, gave up his right to return to traditional media and gave up writing his Substack newsletter.

Casey’s piece is a classic retelling of the traditional version of the Medium story: They controlled too much and cheated authors, they raised too much money, and failed to achieve their overly ambitious goals of fixing the medium. There’s a lot of truth in this story, but the full truth is more interesting and complicated. For those wondering how traditional publishers and open platforms collided, why so many well-intentioned efforts to “save the media” seem to have ended in disappointment, and what’s next for writers and readers on the Internet, this article is worth a read. read.

I don’t have any inside information about Medium, but I’ve been a close observer and user since the beginning, and I was an early employee of their main competitor, Substack. So I think now is a great opportunity to write Medium’s story from my perspective.

First, let’s go back to the beginning.

Medium was created to solve the content discovery problem

In August 2012, Ev published an article introducing Medium to the world. In it, he recommends three reasons for writers to use Medium:

  1. Focused writing experience
  2. Collaboration tools (e.g. Google Docs style comments)
  3. Recommend your articles to new readers through curation and algorithms

For the first reason, the UX of writing is a classic example of a product wedge. Come for the tool, stay for the network. Even if no one you know uses Medium, you might want to post there for a focused writing experience and overall high-quality design.

But this feature alone can be easily replicated. That’s where the next two selling points come in. By building a commenting system, they created a reason for writers to share Medium drafts with friends to pull them into the network. By making recommendations to new readers, it creates a potential network effect, where more readers lead to more authors, and more authors leads to more readers.

To many writers, Medium felt a bit like how TikTok and YouTube felt for video creators when they were just starting out. This is very exciting and new in 2012. I still remember the excitement when I got an invitation to test. My first post was seen by thousands of people.

I can’t go back to WordPress again.

It worked!

Over the next few years, millions of people read stories published by hundreds of thousands of writers on Medium. They attract almost every celebrity and organization you can imagine, including the President of the United States.

I think this is mainly due to one main reason: you can publish an article without starting a blog.

This makes Medium the perfect place for those who have something to say but don’t want to keep committing. Great! But there’s a catch: that’s why Medium is called the Internet’s “PR dump.” Anytime anyone wants to promote anything, they will post about it on Medium.

To make matters worse, there are more and more signs that the content has quality issues. This isn’t a problem that’s unique to Medium, but cheesy work tends to be frustrating. Just as people complain about embarrassing self-help posts on Twitter now, people were upset about Medium’s self-help posts back then.

According to an article published in 2015, the top ten Medium posts are:

  1. Welcome to Medium
  2. 37 Best Websites for Learning Something New
  3. How quitting my corporate job for my entrepreneurial dream ruined my life
  4. 8 Things Everyone Should Do Before 8am
  5. 7 things you need to stop doing to be more productive
  6. 33 Websites That Make You a Genius
  7. How to Lose Weight in 4 Easy Steps
  8. Advice from a 30-year-old to a 20-year-old
  9. should and must crossroads
  10. 7 rejections

In short, to “raise” the average level of work on their platform, Medium hires journalists and writers to write for them, and even has a strategy of letting people create full-fledged professional magazine-like publications on their platform. Some of the resulting pieces were indeed pleasant surprises, but it also cost a lot of money and quickly became a problem.

I think we all know what happened next.

They turned to subscriptions

In 2017, Medium shut down their advertising business and pivoted their strategy to a subscription business. It turned out to be a rather prescient move.

If they continue down the road of advertising, then all the headline party and low-quality content they struggle with will have a pretty strong incentive to thrive on the platform. Their theory is that by moving to subscriptions, the rewards for publishing lots of shallow content will decrease, while the rewards for publishing more manageable, deeply interesting content that can reach a wider audience and start cannibalizing book publishers and Magazine territory.

Their goal is to start a Netflix-like virtuous cycle where subscription revenue can fund new work by world-class writers and journalists, which will generate more subscription revenue, and so on. This sounds like a good loop in theory, the challenge is how to make it work in practice.

The way their paywall works is unique. Anyone can post anything on Medium for free, but you can also choose to put your story behind their paywall and get paid. How much you get paid depends on how many times people click the “clap” button, among other variables.

The advantage of this system is low investment and simplicity. You don’t need to launch anything, design a coherent value proposition, or even get anyone to pay you. Medium does this for you, you just need to tick a box. This easy-to-use approach is reminiscent of Medium’s initial success: just like you don’t need to start a blog to publish an article, you can add an article to a paywall without launching a subscription media product.

The question is: the easiest, not the best, way to make money by building writing online, what kind of writers does Medium attract? Furthermore, the value proposition to readers is always vague. What kind of stories do you get when you become a subscriber? Why are they worth paying for? Who is it for?

The answer then (and now) seems to be: all types of stories, for everyone.

Reviewing Medium's 10-year history and exploring the future of the "Creator Economy"

Such broad value propositions often don’t work, especially for something as cheap to produce and expensive to consume as writing. But Medium seems to have built a pretty decent subscription business out of it! That’s not surprising — especially if you consider their reported $600 million valuation — but it’s much better than most people realize.

This may come as a surprise to some, and while they may not be growing as fast, I reckon Medium actually makes more money than Substack. In early 2021, Medium said they had 725,000 paying subscribers, which equates to roughly $43 million, of which 50% is reportedly paid to authors, leaving the company with more than $21 million in revenue. And Substack is said to make $9 million in 2021. So even if my estimates are biased, that’s a pretty healthy margin of safety.

There are two key drivers for the Medium subscription business:

  1. Huge funnel top. Their nearly ten-year run has produced numerous articles, and their continued presence on Google and elsewhere has given them 170 million monthly users.
  2. Excellent acceptance rate. Medium can keep 50% of the revenue compared to Substack’s 10% because they drive author discovery. All you have to do on Medium is post content so you have a chance to make money. Whereas on Substack, you bring your own readers, which gives writers more power to leave, and therefore more power to set prices.

The downside to this wonderful acceptance rate, though, is the quality of writers willing to put a lot of effort into a Medium subscription. Most of the most valuable authors seem to choose to publish their content through traditional publications, or platforms like Substack or something like Ghost, ConvertKit, etc. It turns out that creating the easiest way to make money online writing doesn’t necessarily mean you’ll get the best articles. As with most media types, most of the value in writing comes from click-through rates, which Medium doesn’t seem to have.

So now it seems that the flywheel of their dreams—Medium using subscription revenue to attract good writers, and then using good writers to attract subscription revenue—is no longer accelerating.

Where have all the great writers gone?

There’s a saying that Substack ate Medium’s lunch, but I don’t think so yet. The vast majority of the revenue generated by all forms of writing is still captured by the top publishing companies: newspapers, magazines, book publishers, etc. The New York Times is booming. The same goes for Bloomberg and many other subscription publications. Book publishers are on a roll — most of their authors haven’t gone directly to Amazon or other sites. Even Substack, which has far more momentum than Medium, is attracting fewer big-name writers now than it did a few years ago. (They don’t report detailed metrics like “new writer earnings”, that’s just my opinion)

We’ve now entered the “creator economy” craze. If we compare the shape of this curve to the adoption of PCs, the Internet, smartphones, etc., it may not look all that interesting.


Of course, this could be a lull before these online platforms find their next unlock, as Substack came up with Substack Pro in 2020, which helped them attract indie writers they hadn’t considered before. However, the current stabilization period is still a bit odd. You would think more writers would go where they can make the most money and have the most control. Some people do. But that’s not the majority.

Why? Independence isn’t the only thing that matters to writers.

Here are a few examples:

  1. Obtain. It’s hard to randomly reach out to some well-known people, say you write on Medium or Substack, and have them take the time to chat with you about the story. To be clear, it’s not impossible, but you need to be fairly successful and have established your brand for it to work. And in the case of writing for an established publication, even new authors enjoy a level of baseline access that far exceeds the resources available to authors themselves.
  2. venture capital. When you get a job at a newspaper or magazine, they pay you a salary. When you sign a book contract, you get an advance payment. If your work ends up being popular, you have the leverage to ask for more money. But what if your work isn’t that popular in the first place? Unfortunately, this is the most common case. If you’re alone on the internet, you’re going to have to do something other than writing to make a living. But when you have a publisher, you can stick around longer. Publishers are like venture capital for writers. They bet early to give people a chance.
  3. prestige. Maybe this will change in the future, but for many, it still makes some sense to be published by an established institution. Seeing your own book in a bookstore, or seeing your name on the front page of The New York Times, is a lifelong desire for many writers—even if some might find it unreasonable.
  4. support. Starting an independent writing business on the internet involves more than just writing. When you work for a traditional publisher, they handle everything for you – graphics, fact checking, text editing, legal, liability insurance, etc. Not to mention social media, paid user acquisition, events and conferences, gifts, and more.

And that doesn’t include the publisher’s most important advantage right now: reaching audiences.

I omit this on purpose because both Medium and Substack offer it, and online platforms can theoretically provide more spread than traditional publications. But in reality, traditional publishers still outperform online platforms at this point, at least when it comes to writing. (The video is different.)

Sacrificing some independence to partner with a traditional publisher clearly has its drawbacks, but based on the fact that more writers have yet to flee, the pros outweigh the cons for most writers.

What’s next for the Internet publishing industry?

Foremost among these value propositions is the ability to compete with traditional publishers. Substack has expressed interest in offering many of these services to writers through their “Pro” product, but as far as I know, it’s not mature enough. I’m curious if Medium will try to go this route.

There are also new attempts, like my company Every, which tries to combine the advantages and control of independent writing with the distribution and support of traditional publishers. But we are still small.

At the same time, Substack is showing signs of developing a network effect that doesn’t rely solely on algorithmic recommendations for content. As I’ve written before, there is a contradiction between their ideology and their business motives, and it will be interesting to see how they navigate this contradiction. But I think they have a good chance of creating the first true YouTube-style writing network. Maybe everyone, even big media companies, will post videos on YouTube instead of their own website, and maybe one day writing can exist in a central walled garden.

So, has Medium succeeded?

The question is: success in what? There was a lot of lofty talk early on about fixing the attentional systems that feel dysfunctional on the internet, and I think it’s pretty clear that these systems are going to be as powerful as ever. However, are there any other reasonable expectations?

Medium raised a lot of money in the early stages of its rapid growth, and it might be hard for these investors to consider Medium a financial grand slam. But that’s true of a lot of things — especially if you’re doing something related to writing. I think those investors probably know that. Their expectation of entrepreneurs is not to guarantee success, but courage and hard work. And from what I can tell from the public tweets, they all seem happy to support Ev and the team.

No one would say that Medium hasn’t worked hard to build the right model over the past 10 years. You can accuse it of being indecisive or vague, but I have another take. I think it’s a story about trying to do something really hard, holding yourself to the highest standard imaginable, and refusing to give up, not letting things take their course even when the going gets tough.

I’m sure many employees and customers who have been negatively affected may find this argument unpleasant. But what more can we ask of entrepreneurs? Do we really want to live in a culture where people are afraid to try new things or change direction because they would be ashamed? What can customers and employees reasonably expect from the startups they choose to work with? If you’re going to join a startup, you have to know that there’s a good chance the company will fail, or veer in a direction that makes your service unnecessary. If you decide to use a startup’s software, obviously you also take some risks. If you’re not interested in this risk, then well, go work at Google or use WordPress!

Of course, I don’t know all the details here. I’m not writing this to defend everything Ev or Medium has done. What I’m trying to say here is that this is a lot more complicated and interesting than Casey Newton’s article.

It’s easy to scoff at how the story ended, and it’s likely that Medium will never grow as fast or attract as much hype as it used to. But it’s not a 100% certainty, and I think it’s a good thing to have a new CEO at the helm with a new vision and new energy. I still support them.

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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