Substack came under substantial pressure in 2023 for hosting paid newsletters that promoted Nazi ideology and symbols. The company dithered in response to complaints, fueling questions about its values. And in 2019, the company received a major investment geared at attracting journalists with audiences from venture capital firm Andreessen Horowitz โ whose head Marc Andreessen is a major Musk ally, recruiting staff for his DOGE efforts.
Substack's Role in the Network State
The company is also a major tentpole in a parallel establishment envisioned by Andressen and other promoters of the Network State movement, which specifically aims to dismantle the United States and replace it with a federation of smaller, competing fiefdoms. At the inaugural Network State conference in Amsterdam, in October 2023, the movement's leader Balaji Srinavasan said (with edits for clarity):
I'm gonna introduce a new concept today, which is the parallel establishment. Each of them replacing a different legacy institution. So for example, at the top there's San Francisco and we're replacing San Francisco with things outside it like Cul-de-Sac in Arizona and Prospera in South America and Cabin, which is in Texas, but also around the world.
We're gonna take out Harvard, and we have parallel education that's Replit, that Synthesis, which is K through 12, but it's also AI tutoring, the Thiel Fellowship, Emergent Ventures. We replace media with parallel media. It's Twitter and X, it's Substack. This concept of the parallel establishment, if you take up all of these new institutional replacements on the right hand side together, that's a parallel establishment.
They exist alongside, the legacy and parallel. They're gaining strength. They're pulling away users until they become the new thing. So this is how we turn that seemingly impossible thing of building a new country, break into a bunch of individual startups and then aggregate them together.
Srinavasan's statement makes clear that Substack is seen as part of a networked effort to replace, rather than augment, legacy media. And it is precisely Substack's strong network effects which are fueling its growth. Substack simplifies the relationship between publisher and reader while also making it easy for creators to amplify and reference other creators on Substack, while simultaneously imposing friction for sources on the open web. Substack's goal is to win. (Readers may be aware of Peter Thiel's book Zero to One, co-authored with Blake Masters, which discusses the power of network effects to achieve effective monopoly control.)
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