Back in 2017 I wrote a post called Faceless Publishers that posited a need for new kinds of companies to fulfill traditional publisher roles for content creators who were their own brands. This was my conclusion:
I suspect this is part of the endgame for publishing on the Internet: free distribution blew up the link between editorial and publishing and drove them in opposite directions — atomization on one side and massively greater scale on the other. And now, that same reality makes possible a new model: a huge number of small publications backed by entities more concerned with building viable businesses than having memorable names.
Ghost, the subject of today’s interview, is as pure an expression of that sentiment as there is. Ghost is an open-source content-management system (CMS) managed by the not-for-profit Ghost Foundation, and today the Foundation announced Ghost 3.0 with support for paid memberships (a la Stratechery). This is done with a business model that could not be more author-friendly, but I will let Ghost Foundation Co-Founder and CEO John O’Nolan explain why.
On to the update, which is free to share (there is no paywall):
An Interview with Ghost CEO John O’Nolan
My questions and commentary are in bold; this interview has been lightly edited for length and clarity.
Can you explain what Ghost is and where it came from?
John O’Nolan: I used to be a core contributor to WordPress and that’s where I really got my roots in open source and particularly building products and doing design in open source. What I noticed back in 2012 was that WordPress was evolving more towards the site builder space, but my interest has always been very closely in the publishing space. There are also a number of other problems with WordPress in terms of the technology getting a little old, it looks a little tired, and at the time I had an idea of what would WordPress look like if you rebuilt it for the modern day and age with modern technology and a focus on publishers only.
I wrote that vision up in a blog post which led to a Kickstarter campaign in 2013 that raised just over $300,000, ten times its funding target — the idea resonated with a lot of people. The big difference was that we built the platform in Node.js rather than PHP, it had beautiful design from the start, was heavily focused on writing and publishing, not just generic website building, and the business model has been one that is focused on sustainability and independence.
So what is that business model? How does Ghost make money? Is Ghost even a company?
JO: Ghost is a not-for-profit organization: there are no shareholders, the entity is entirely independent, it can never be bought or sold. If at any point I want to step down, I can hand over my trusteeship to someone else but I can’t “cash out”, as it were.
Are you the one hundred percent trustee — I’m not sure what the term is — but it’s all you?
JO: That’s right.
Are there bylaws? What happens if you get hit by a bus — not to be grim or anything!
JO: So we have a company constitution which defines what the organization can spend money on and how all of those bylaws fit together, but there are no shareholders and there is no share capital, so even if someone offered to invest, there is no mechanism by which to take any money or to give any ownership stake.
How many employees does Ghost have?
JO: Fifteen, full time. And a range of other consultants and contributors.
So what is the business model for Ghost? How does Ghost pay those fifteen employees?
JO: We provide a managed hosting service for the product itself, something that has worked very well in the WordPress space. Our business model is to capture the even smaller part of the market that values managed hosting, being able to run an open source product without any of the hassle of having to self-host. So people pay a recurring monthly fee of between $29 and $200 depending on the size of the business, the size of the site. And then we take care of all of the hosting, all of the upgrades, all of the maintenance, all of the backups, and in doing so we have built a very healthy business. We have been profitable since the first year that we launched, but still in the structure of a totally independent business which will be around for a long time to come. Philosophically, that’s what makes me feel good.
I think that’s all really useful and important context. So why don’t you walk us through what you announced today.
JO: We spent the first five, six years solving publishing tools and publishing workflows, and we’ve gotten fairly good at that. The next big problem that we have heard about the most from our customers and from keenly observing the publishing space is that of revenue and business model. That seems like the best place to focus our interests on in terms of building a tool which is really going to be valuable to people.
What we’re launching now is native membership and subscription functionality directly inside the platform itself, so you can have people sign up to your site, log into it, and then you can connect your Stripe account and take recurring monthly or yearly revenue from them.
So to be super clear: this is a Ghost-the-open-source-project offering, not a Ghost-the-managed-hosting-company offering — is that right?
JO: That’s exactly right. Every single piece of it is completely open source and available under the MIT license.
So basically anyone can go and download Ghost like they could before today, they can run it on their own server like they could before today, and they can manage their own subscription business without having to pay you a dime.
JO: That’s exactly right.
How do you make money doing this?
JO: We already have an existing business model that works very well for us and we really aren’t looking to change that too much. The current business is doing very well, and we feel that if we can attract more people to using Ghost full-stop then that existing business model will continue to work for us. Anyone can self-host if they wish, but if they choose to pay us, then our costs only go up if we get more customers, so there is alignment there.
JO: Yes. If you have some technical ability and you are happy to self-host, you can do it one hundred percent for free. The only thing you’d pay is Stripe fees and whatever your hosting provider fees are. If you want to automate some of the process, make it a little easier, spend more time on writing, less time on managing a server, then you can use our managed hosting service which is called Ghost Pro, and typically that pays for itself many times over in terms of how much time you save just using that.
Who holds these subscriber lists then? Where are they managed?
JO: This is one of the biggest areas where we differ from the alternatives out there. With Ghost you have a vertically-integrated membership database and publishing system in one, which means your site can adapt to your members, which is a more exciting long-term functionality we are interested in. But you also own all of the data, so you own the customer records, you own the Stripe account, you own the site, you own the hosting, nothing runs through any single point of failure or centralized system. So even if Ghost, the company, or Ghost, the foundation, were to go away at some point, your site would keep working, your business would keep running, and you would still maintain ownership of every part of the intellectual property. So no one can shut you down when the VC money runs out, it’s your technology.
Just to be super clear on this: when I started Stratechery I was using a membership plugin that was hosted on my site and I actually used Stripe to manage the subscriptions because Stripe does have subscription functionality. Now I’m on Memberful and Memberful actually manages subscriptions, payments are still handled via Stripe. But I’m no longer using Stripe for the subscription functionality. So where does Ghost sit along that spectrum?
JO: So Ghost has your members natively within the system itself and then it has a deep integration with the Stripe plans and billing API, so all of the billing logic and functionality sits directly in your own Stripe account which you connect to via API, it’s not via our Stripe account, and you have full control and ownership over that at any point in time. In the future, we are also interested in whether or not there could be other payment gateways that you could use in countries which don’t necessarily have Stripe, but for now it’s deep Stripe integration.
To be clear: is the actual subscription management done using Stripe plans or is it done by Ghost with Stripe billing?
JO: It’s the full Stripe plans and billing API’s.
Got it. So Stripe is the one that’s sending the renewal emails, for example, or anything along those lines.
So it’s fully integrated with Stripe, and given that it’s my Stripe account, and all the subscriptions are in my name, you couldn’t take a skim of the transactions even if you wanted to because you have no link or insight into that.
JO: That’s correct. You have complete autonomy.
It certainly sounds great that I don’t need to pay for membership services, but at the end of the day, I kind of like paying for membership services. I like paying because I want the service provider to be around, and to continue to support me. How does Ghost respond to that given that there isn’t even a mechanism for me to pay for membership functionality beyond paying for optional hosting?
JO: The Ghost Pro plan is the best answer to this really, and if you want the best experience, premium support, guaranteed uptime, all of the automated upgrades and backups, everything you want guaranteed that your site is going to have the best experience going forward, then that’s really the reason to use Ghost Pro, and that simultaneously funds one hundred percent of the future development of the product itself. The plans start at $29 and they go all the way up to thousands of dollars in custom plans for enterprises. So that’s kind of the best use case for using our existing managed hosting business: you want support and you want stability.
What happens in a post-John O’Nolan world? A concern that I have with Substack, as I’ve noted, is I don’t understand why they raised millions of dollars from a large venture capital firm. I don’t know that the business scales to that extent, and that it’s going to require choices that I’m not sure make sense. It’s the same thing with Memberful: it concerns me that it was purchased by Patreon, which has raised a tremendous amount of money, and I worry about what the long-term impacts of that are.
On the flip side, Ghost has not raised money, it’s impossible for it to raise money, and while that has its benefits, if John O’Nolan gets hit by a bus tomorrow, how can a writer feel good about investing in a completely new platform and that being sustainable and trustworthy in the long run?
So what is the motivation here? I don’t get the impression you’re going to get rich doing this, so what is the driving force to offer what seems to be almost a too-good-to-be-true deal for publishers?
JO: Ghost is at the intersection of all of the things that I love. We’ve managed to create a globally-distributed company which gives us the freedom to live lives we enjoy, the ability to work on a product that feels meaningful, in a market feels like it needs us and to me that’s enough. So my long term goal is for this to be a company and a product which is around for fifty, a hundred years. I’ve deliberately structured it at every juncture in a way to try and prevent myself from becoming enormously wealthy from it because I feel like the more my interests align with the customer’s interests, the more likely the business is to serve the interests of its users and not just focus on whatever is necessary to raise the next largest round or get the biggest acquisition number. My personal interest is deeply in publishing, it’s deeply in journalism, it’s deeply in seeing independent voices be able to have something meaningful to say in the world and to be able to sustain themselves doing it, and that’s what we optimize most of our product and business decisions around.
The profit motive can be criticized, people complain about it, but at the same time it is a propulsive force that pushes a company forward. It means that products are going to be worked on and going to be improved. Given that, if I’m coming up as a publisher and I want to do this for the next ten, twenty years, how do I ensure that that propulsive force remains in place for Ghost, or is it really just “Hey, it’s open source, if you’re not happy with how it’s going, you can hire your own developer”?
JO: It’s a little bit of both. You’ve got the open source answer as the fallback, the safety blanket, but the real answer is to look at the track record and history, and so far we have satisfied these socially-good motivations even as we have built a very healthy business. We now have just over $1.7 million a year in revenue, all of which is in the black after month eleven of being in business. We have not had a single month where we didn’t have our bank balance go up and not down. We’ve proven that we know how to build a sustainable business over time and keep it that way, and we’ve proven that we’ve built technology that people care about.
We have sites as large as OpenAI and Cloudflare’s blog, which usually has very high levels of traffic week-to-week, along with Apple’s internal team blogs, which indicate the trajectory that we are on and continue to stay, which is building good things that people actually want and being around to make them better.
I know I’ve hammered on the business model, because to me that’s one of the most compelling aspects here, but tell me a little bit more about the product itself. What’s the balance between being a website and a newsletter? Ghost has traditionally been a CMS for websites, but the way this subscription model has worked out, the email component has become a significant one. At the same time, one of my critiques of Substack is it feels a little too email focused; for me, the website is actually still really important, particular for customer acquisition. I’m curious how Ghost, coming from a website perspective, thinks about the balance and the tools that you will offer?
JO: I think email is incredibly important, but it’s also in my view one of the easier problems to solve. You can set up a Zapier connection between Ghost and Mailchimp and you can achieve what almost any paid newsletter platform offers. The really difficult part is the modern CMS and the modern website — getting that side of things right is very, very difficult. So the balance we try to strike is between a tool that publishers actually want to use — so you want an experience in writing like Medium’s editor, you want the back-end to be fast and pleasurable to work with, if you’re going to be in it every single day for hours at a time — and at the same time you want the underlying technology to not fall apart or slow down or just be a terrible security risk. So it’s trying to find the balance of all the different motivations of people who are on a team that run a website which is a mix always of developers, business people, and content producers.
To get into this specifically, you have a CMS offering now, you’re adding on subscription management, so you’re saying for the other pieces you’re going to rely on something like Zapier to handle those integrations, and you’re not offering your own emailing service or something along those lines?
JO: Zapier is a really neat, fast step to get going to prototype potential integrations, potential apps, potential additional services, and I think the more those prove themselves out, the more they justify further investment in what other potential modules there can be. Email is very, very high on our list in terms of additional functionality, and we’ll be interested in natively supporting that within Ghost, and I think with our API-driven architecture it’s one that we’re well positioned to build.1
There are lots of other tools which I think that could be interesting add-on extensions. We look at WooCommerce a lot in terms of business models, and an interesting model for the open source world, where they have a free core e-commerce system and you can add on modules for different payment gateways, different shipping providers, different marketing platforms, some which are free, some which have annually recurring fees for that functionality, and I think that could be interesting. We’re kind of keeping these ideas open-ended to see what people respond to. Obviously this is the first time we’ve launched something like this, and we want to see what the early requests are going to be from users to prioritize what’s important to build next rather than just going all in on our own ideas.
Are you launching with any prominent partners? Or is this literally your ground zero announcement and you kind of want to get word out there? What’s the launch plan?
A reason I find this so compelling is what I wrote about a few years ago in The Faceless Publisher. The idea is that on the Internet individual authors that can command an audience create a huge amount of value but how do you capture that? You still need the infrastructure of a publisher to take care of all of the stuff that doesn’t involve writing — actually commanding an audience is the most difficult thing — and there’s room and space for companies to basically take care of everything else.
What you are offering is the platonic ideal of that idea, particularly given the funding and business model, because I have a hard time seeing how you can be a sustainable, truly faceless publisher with a VC business model. The need for growth immediately sets you in opposition to the folks that you’re supposed to be supporting as far as capturing money in the value chain. As I’ve noted, as a writer in this space, I’m more than happy to pay lots of money for tools, and I do, but at the end of the day I want them to be happy I’m making more money and for our incentives to be aligned, and I’m not sure that the venture capitalists in particular will be aligned with me as an author. I’m not anti-VC in the slightest, as I think is clear, but in this particular case I’m just pretty skeptical that there will be VC-level returns. Then again, raising money from a prominent venture capital firm also buys you a lot of attention, a lot of publicity, a lot of big names, so I guess the there are both advantages and disadvantages.
JO: Definitely. So we’re also announcing today that we’ve made $5 million in revenue from customers and we’re announcing it under the guise of a funding round, which of course it isn’t, because we’ve given away zero percent of the company. It’s not nearly as cool as saying you’ve raised a $5 million Series A, apparently.
One more question about the long run: is subscription support something which, if you end up not getting many folks that are interested, that you’re going to abandon? The VC-incentive cuts both ways, right? The folks that have taken VC money for this model, they’re going to do everything possible to succeed because they have no choice in the manner. You guys have a choice in the manner, you can sort of bail any time, so if I am a new publisher, what should be the confidence that you’re in this for the long run?
JO: That’s a great question. It’s definitely true what VC money will motivate you to do, but I think that our perspective on this is that we have a longer horizon to figure it out than most people. So we’re not thinking about how to solve this in the next eighteen months or bust, we’re thinking about how do we solve this properly and getting it right in the next five to ten years. It doesn’t necessarily mean we’re moving any slower, but it means the way in which we’re making product decisions are based on a longer timeline than other people in the space. We’re pretty committed to this, we really think it’s going to be the future of independent publishing in many aspects, and the subscription commerce potentially could be on a similar level to e-commerce depending on how people execute. We’ve been around for six years, I would like to say we’ll be around for another sixty at least, but I think the proof is in the pudding. You’re just going to have to see that we stick behind what we say we’re going to do, always have done, and plan to continue doing so.
I find this extremely compelling. I think with any sort of business model and approach, there are tradeoffs, there are pros and cons, and I think I’ve kind of hammered you on the cons here, but that’s more a function of my being very excited about this model as someone operating in this space. I love the open source aspect, the fact that at the end of the day I can go hire a developer and that’s my backstop. That’s a really powerful backstop that I think is pretty meaningful and I look forward to seeing how Ghost develops.
JO: Thank you very much, and I’m looking forward to trying to convince you to switch over.
We’ll see how that goes!
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- Note: The final clause was added by O’Nolan in a post-interview conversation when I asked him to clarify this part of the interview [↩]