๐ Could SPACs create the next dot com bust?
๐ฐ Itโs truly SPAC szn, ๐ค Substackโs questionable future, ๐ฏโโ๏ธ Story clone wars
Yo!ย โ๏ธย Iโmย Brett! I am a founder and former Cognitive Science researcher.ย Social Studiesย is a semi-weekly newsletter for people building great products for humans. It includes recaps of what happened on Tech Twitter every week plus deep analysis using frameworks from Psychology, Economics, and the other Social Sciences.
โจ TLDR
๐ฐ Itโs truly SPAC szn - So many companies are IPOing via SPACs lately. Most have been great, but SPACs may incentivize terrible companies to take advantage as well.
๐ค Substackโs questionable future - Substack has about 250K paying customers and great writers like Casey Newton are joining every week. That said, Substackโs economics donโt quite add up according to Jason Calacanis. Benedict Evans disagreed.
๐ฏโโ๏ธ Story clone wars - LinkedIn launched its stories clone. As cringe as it seems, most of Tech Twitter was actually pretty bullish on it.
๐ฐ Itโs truly SPAC szn
Tons of companies have been going public via SPACs lately, and it seem to have hit a peak over the last few weeks.
SPACS, or special purpose acquisition companies, essentially allow companies to go public without the hassle of dealing with Wall Street - they simply get acquired by an already public shell company.
With three SPACs under his control, Chamath has been the ringleader of it all. Hereโs him talking about the OpenDoor SPAC IPO recently.
While a lot of amazing companies are utilizing SPACs, itโs obvious this could be used by not so great companies as well. Think dot com bubble or cryptomania in 2017. Great point from Turner.
๐ค Substackโs questionable future
Axios reported that Substack has about 250K paying customers with its top 10 publishers bringing in $7M collectively. More and more journalists seem to be jumping ship to the platform with Casey Newton from the Verge being the most recent big name to do so. Substack had offered him a big package to join the platform last year but it wasnโt until last week that he finally came around. Check out his announcement.
Despite the incredible growth, Substackโs economics are pretty questionable for its top publishers.
Ben Evans argues that you actually do get a lot of value from Substack.
Either way, itโs a race to the bottom in terms of take rate. More and more fully-featured Substack competitors are emerging every day with better terms for writers and writers are eagerly looking for alternatives.
In order to stay competitive long term, Substack will need to add more features like discovery and ad monetization to make its lofty take rate worth it. That or they could just become their own media company as seems to have been the case with Spotify and Netflix lately.
๐ฏโโ๏ธ Story clone wars
LinkedIn announced its new Stories feature (and Twitter has been slowly releasing theirs). As cringe as the blatant feature cloning seems, stories is very much a general format that happened to be pioneered by Snapchat.
The format unlocks different opportunities on different platforms. For Snapchat and Instagram, thatโs obviously a lot of personal updates but also broadcast entertainment and shopping.
With professional platforms like LinkedIn and Twitter launching stories features, weโll obviously see a lot more educational content and professional entertainment. Turner Novak pointed out that this kind of content lends itself a lot better to the passion economy (e.g. paywalls). The consensus seems to be that despite how cringe LinkedIn stories seems, there is a strong bull case for it.
๐ Dopamine hits
๐ Long reads
๐ Thanks
Turner has been on a TikTok tear. This is one of his best. Enjoy!
