The Biggest Mistake I've Made On Substack The Last 2 Years

Photo by krakenimages on Unsplash

I felt like an idiot.

The other day I was staring at a massive executive summary of my entire Substack business over the last 18 months.

I compiled every number I could—monthly paid subscribers, free subscribers, actual revenue generated, annualized revenue—to see what I was doing wrong.

And the findings were brutal.

I realized I’d never made more than $3,000 per month focusing only on paid subscriptions. In fact, my average was closer to $1,000 per month.

Meanwhile, in the past I’ve made anywhere from $5,000 to $18,000 on a single online course launch.

That’s 5x-18x more money in one go than what I average per month with paid subscriptions.

I felt like I’d wasted 18 months of my life selling out to building my “Annualized Revenue” numbers, while everyone else was out there building real businesses.

Let me tell you exactly what happened, and why 99.9% of Substack creators are probably making the same mistake I did.

The Day I Realized I Was Selling Myself Short

Three weeks ago, I decided to do something every creator should do but most never will.

I created a complete audit of my business, and got AI to analyze it.

I fed it everything. Every article I'd written. Every paid subscriber milestone. Every monthly revenue report. Every strategy I'd tried to grow my paid subscriptions.

Then I asked it to tell me—with brutal honesty—what I was doing wrong.

Claude didn't sugarcoat anything.

"Based on your data, your highest-earning month from paid subscriptions was $2,500. Your average monthly revenue from subscriptions is $1,000. However, your course launches in 2017-2024 generated $6,000-$18,000 per launch, with one program bringing in $18,000 from 70 people at $300-$500 each."

I sat there staring at my screen, dumbfounded..

I’d spent the last year and a half obsessing over paid subscriber growth while ignoring what actually made me money—online programs.

The Orange Checkmark Isn’t As Worth It As You Think

In April of 2024, I got the orange bestseller checkmark on Substack. It was a great day, and I felt like the sky was the limit for me on this blooming platform.

But what I didn’t realize was that I was still making less than $1,000 in cold hard cash from Substack every month—even with a bestseller badge. But it felt good! Oh yes, it felt good, and it gave me hope that I could get to 1,000 paid subscribers in time.

Here's what nobody talks about, though:

The orange checkmark messes with your head.

It makes you feel like you've "made it" on Substack, like you're somebody, and that your voice matters.

I wanted that checkmark so badly that I restructured my entire blogging strategy around it. I created monthly live trainings, offered detailed templates, and built seven-day writing sprints for subscribers.

Then I started creating amazing AI tools that help people go viral on Notes every day. I also created an amazing Notes Community so folks could escape the void—which was a big problem on Substack.

It looked like success! Over the course of 3 months in early 2025, my “Annualized Revenue” doubled, and I felt that familiar friend—hope—appear in my heart.

But I wasn't looking at the real numbers..

The ‘Annualized Revenue’ Distraction

Let me tell you about Substack's dirtiest trick..

They show you "Annualized Revenue" on your dashboard.

Why would they even have that metric? Why not just show us what we made this month in total?

Well, because if they showed people they only made $10, $50, or $100 this month, most would lose hope and likely quit.

The annualized revenue graph makes you feel rich when you're actually kinda broke.

Here's how it works:

You get 10 new paid subscribers at $10/month. Substack shows you that you just added $1,200 in "annualized revenue."

It feels like you made $1,200.

But you didn't.

You made $100. This month. Before Substack's 10% cut.

And half those subscribers will probably churn within six months, but you're staring at that pretty graph thinking you're building wealth when you’re not.

You’re Diluting Your Own Value

Here's what actually happens, though, when you solely optimize for paid subscribers:

You dilute your own value.

You give away everything in your $10-$20/month subscription that you could charge $300-$500 for in a course.

I created AI tools that easily could have been standalone products for $300 per year. Instead, I bundled them into my $20/month subscription for $160 per year.

I was literally selling myself short by 50%.

Why? Because Substack conditions you to think in terms of monthly subscription pricing. It’s not so much that Substack brass is scheming about how they can keep you poor or anything.

No, of course not.

But when the whole platform is based around monthly subscriptions, you start wanting to optimize for JUST paid subscriptions.

You think providing more value will get more signups, but it doesn't.

You might get 10-30 new paid subscribers per month if you're lucky, and at $10/month, that's $100-$300 in new revenue. Meanwhile, you're probably losing subscribers at nearly the same rate you're gaining them.

It's like running in quicksand.

The Reality Check Most Substack Creators Need

Here's the truth about Substack success:

Getting to 1,000 paid subscribers is incredibly hard, and 99.99% of creators will never get there.

Even if you do get there, 1,000 subscribers at $10/month is $10,000/month before churn and Substack's cut.

Sounds great, right?

But you need a massive free audience to get to 1,000 paid subscribers. We're talking like 20,000 free subscribers at a minimum.

My New Approach

I'm not abandoning paid subscriptions completely.

No, I'm keeping my paid tier, and I'll keep giving subscribers generous access to my AI tools, and I’m going to keep my Notes community alive and continue adding more great AI tools every month..

But I'm shifting more of my focus to creating high-ticket courses and programs for the rest of 2025 and into 2026.

Because I finally realized something:

Substack shouldn’t be your only revenue generator. It should probably be looked at more as your marketing, to be honest.

And that’s okay! It doesn’t mean Substack, or the people running it, are bad, it just means that you shouldn’t put all your eggs into the basket of paid subscriptions.

At least, that’s what I think. What about you?

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