AMA! I'm Nathan Barry, the founder of ConvertKit ($968,000/mo)
Hey there! My name's Nathan and I created ConvertKit, an email marketing company that I've bootstrapped to $968,000/mo. I've also written a few books on web design and audience-building. Feel free to check out my IH interview or hear me chat with Courtland on the IH podcast.
Ask me anything!
I'll give you some time to leave comments and questions and then I'll come answer them on Friday, March 9th.
What's the thing that's most helped the success of ConvertKit that no one ever knows to ask about?
I really like this question, but I'm not sure I have a great answer. I've written about most everything related to ConvertKit.
One thing that is often overlooked by founders is time.
Most founders have too short of a time horizon. They are thinking they'll build this company for 3-5 years and then do the next thing.
It took nearly 5 years to get to $10m ARR. We have a goal to reach $100,000,000 in ARR with a team of under 50 people (https://convertkit.com/mission/). We're so far from that it seems incredibly daunting.
But then look at MailChimp. They've been at it for 18 years now. In 2015 they did $250m in revenue. $400m in 2016. $600m in 2017. They grew by more than 2x our loftiest goals in a single year.
That's why my time horizon is at least 10 more years. We're just getting started and I think many other founders who follow our journey think we are nearing the finish line.
You've shared a lot about your personal growth as a founder, so I'd guess you've talked to many first-time founders looking to emulate your success. What's one thing you think most new founders should be doing to increase their chances?
Two things: direct sales and concierge migrations/onboarding.
Get out and sell your first 50 customers 1-on-1. What you'll learn from that is pretty incredible! Use content marketing, email lists, launches, etc as well, but direct sales is the fastest way to get traction.
If the switching costs are high do the switch for the customer for free. Don't worry about the costs or ROI for you. It's just your time. MRR compounds. Every $50 of recurring revenue is worth a fortune to you in the early days.
Reading your story, it seems as though you attribute a lot of your early customers to direct sales. What were some of the methods you used to fill your pipeline with qualified leads?
Check out this post on direct sales: http://nathanbarry.com/sales/
In short, I filled the pipeline by:
Using BuiltWith and Nerdy Data to scrape the web for sites using specific providers, sorted by alexa ranking.
Making lists by very narrow industries (e.g. email marketing for paleo recipe bloggers who are women). That usually happened through a mix of Google searches and Twitter.
This second method had much better response and engagement rates.
The amount of content you've created is amazing for people chasing the dream. Thank you.
Hey Nathan, what's your number 1 tip for running a successful remote team?
Get everything documented online (we use Basecamp). With a remote team you have to leave a paper trail for every decision that was made so that everyone else can follow along.
The most toxic thing to a remote team is when some conversations happen offline and the context isn't shared with everyone else. By pushing all the communication to slack and Basecamp it all happens in the open. One of our core values (convertkit.com/mission) is to work in public, which is a huge part of our push to fight against this default.
As a fellow indie-hacker, I can help you with the remote team thing (www.fridayfeedback.com). Most of our customers are remote teams.
p.s. - I realize the irony of trying to sell you as the thread above is about direct sales.
What's your largest growth channel right now?
Our webinar and affiliate programs are the single largest channel. We put a lot of effort into them. About 1/3 of all our revenue is driven by affiliates.
In fact, on March 11 we have $9,000 worth of trials ending from a big webinar. It should be our single largest day of MRR growth in company history.
Hi Nathan,
What software or services do you use for affiliates and webinars?
Best regards
-Andreas
We use Zoom for webinars and are switching to LinkMink for affiliate management: https://linkmink.com/
Wow, LinkMink from @PhilipAl here on IH? Is that where you found it?
They've been basing product design decisions off of how we run our affiliate program at ConvertKit. So it has best practices built in by default. I can't wait to migrate!
Killer.
Could you share the story behind how you got your first 10 paying subscribers?
I did it through preorders! Here's a post from 5 years ago that I wrote announcing preorders: http://nathanbarry.com/saas-preorders/
At the time of the post I had 19 preorders for nearly $3,000.
"I would cold email people, or ask for intros, or email friends who were bloggers, and I’d say: ‘hey, what are your frustrations with MailChimp"
from: https://www.groovehq.com/blog/nathan-barry-interview
Hey Nathan, I remember you saying that one of your breakthroughs was targeting ConvertKit specifically to bloggers. How did you go about deciding that this was the best target audience to go after?
I'm asking because I just launched a hiring tool for startups and I'm working on finding my ideal customer. Currently, I think that my tool would fit best with founders who are recruiting their first 50 employees. I want to be the first recruiting tool a company uses. It's still early stage though, so any insight about how you would approach this would be awesome. Thanks!
It was more that's who I wanted to serve rather than a great marketing decision. Narrowing down to a niche is always good. If you choose the wrong niche you can always change it later.
What were the strategic decisions that led to such a massive revenue growth? From 1k to 10k MRR, then 10k to 100k MRR and then now to 1 million MRR? What decisions did you have to make to reach those amounts?
Well, we haven't quite hit $1m MRR... but we should be less than a month away!
This is hard to answer. But I'll give something for each stage:
$1k - $10k MRR — Niche down as small as possible. Going from a generic email marketing company to "email marketing for professional bloggers" was critical.
$10k to $100k MRR — Was all about our affiliate program and word of mouth.
$100k to $1m (almost) — Was about the right team and systems. Webinars were also crucial for driving growth.
Would you ever consider selling your company?
I certainly have! Early on I was obsessed with the crazy multiples on ARR paid for high growth SaaS companies. I thought it was an incredible way to focus on something for 2-3 years and then flip it for multiple millions.
But as we were entertaining an offer I realized that every day we waited would mean a significantly higher purchase price...play that forward and if I could continue the growth at that rate I shouldn't sell.
Over time I became set on building for the next decade. So now I'm dead set on not selling ConvertKit.
What's something you're looking forward to in the next 5 to 10 years?
Completely unrelated to the business, but my wife and I bought a small (4.5 acres) farm/homestead 6 months ago. I'm really looking forward to seeing it grow up. Last fall we planted 20 trees and we'll plant about 20 more this spring. Right now we're planning out a new irrigation system for the back pasture, building a walking path around the entire property, and a lot more.
Knowing it will take years for the property to grow—and yet I have to plant the trees now to start the process—is a great balance to my desire to move quickly and have instant gratification.
Seems like you transferred your time horizon learning from convertkit to your home life! :)
If you're running such a high-revenue company with a team of < 50 people, does that mean your employees tend to work crazy hours? Or do you maintain a high bar for high-quality employees?
What are the most important traits that you look for when hiring? How do you measure those traits?
At what point did you add on people to help you? After you already had paying customers? And once they came on, was there a major revamp of everything to make things more stable, pretty, etc.?
I brought on contract development help right away. A few different developers helped me over the first two years. When I decided to go all in on ConvertKit I used a $50,000 investment (of my money) to hire a full-time developer and a full-time customer support manager.
When you started "teaching everything you know" on the NB blog, did you already have an audience of subscribers or were you starting from ground zero? What were your early wins in audience building / writing?
Btw, I used the Commit app back in the day and it was fantastic.
I started the blog as a way to market my very first book (The App Design Handbook). Through tutorials and guest posts I built up an email list of 798 subscribers for that first launch. You can read about it here: http://nathanbarry.com/learned-selling-6000-ebook-today/
That post also details my first win, which was the book launch.
Here's another book launch from 3 months later: http://nathanbarry.com/behind-the-scenes/
Sidenote: It's really fun to have so much to look back on from the blog 5-6 years ago! Just another reason to write and publish regularly.
Was ConvertKit your first project? What things did you try before and why did you move on from them? If they weren't successful, why?
Oh man... I did so many projects before ConvertKit. Here's a list off the top of my head of products I launched:
A hosting company.
A WordPress theme company.
A local social network for businesses.
An iPad app to help nonverbal kids communicate.
A flashcards iPhone app
A habit tracking iPhone app
Book: The App Design Handbook
Book: Designing Web Applications
ConvertKit
Some made decent money, most failed completely. All the early ones were me practicing making money. I love what Jason Fried says about making money being a skill that you practice just like the drums.
Thank you so much for responding to my question! It's funny... I also have a flashcards app on my upcoming radar. That must be a thing. :)
The iPad app to help nonverbal kids communicate sounds awesome actually. What nifty idea!
I think every new developer has to build a flash cards app as practice. :)
That and the "To-Do" list app. lol!
Hey Nathan, thanks for your contributions to the community, and congrats on your massive success. Your interview was the one that actually brought me to IH.
If you had to start a brand new business tomorrow, what would it be?
What do you wish you did differently?
Would love to hear any recommendations you may have for my site/product - Recapped.io
Recapped looks quite neat actually. One note, your live demo has a bunch of broken images. Also, your footer pricing link points to your FAQ. The user has to then scroll up to find the actual pricing page.
Sweet! Glad to help you find this great community.
It would be a payments/commerce company. Along the lines of what Gumroad was meant to be.
I wish I went all in sooner. I wasted a year working on ConvertKit as a side project.
Sorry, I don't know enough about it to have specific feedback.
Hi Nathan,
A lot of people here struggle finding reliable technical staff. Indeed, there are a few people here, who have been burnt by shoddy outsourced work they paid thousands for. I understand that for the back-end of convert-kit you hired a ruby developer - who clearly has done a great job.
Can you share with us your advice on recruiting reliable technical staff as the early stage of a company's life? How do you convince talented people to work for a company, that is small and can only guarantee them work for a few weeks/months?
Having an audience makes this so much easier. I was able to shortcut the entire process because I could reach out to my audience and I had a lot of people eager to work on the product. That said I didn't have perfect experiences.
In the early days I asked a friend who is an experienced developer to review the initial pull requests and make sure things were up to par.
Hey. What is your description of reliable technical specialist?
Someone who is able to build what you wanted, on time and budget, without ripping you off.
I see.
What gave you the initial insight to start ConvertKit? How did you validate the idea?
Hi Nathan, that's awesome. For someone who's grown his company by so many multiples, what would be some advice you would give yourself when you were still 0 to 1 employee in terms of hiring and HR?
On the HR side I'd start by using a company like JustWorks to make it all easier. We use them now with 30+ team members, but even with one it would have made life easier!
great advice and transparency. I was looking at the BareMetrics board here https://convertkit.baremetrics.com/stats/new-customers
For over a year seems like Convertkit struggled to find customer-market-fit. From Aug 2015 new customers started coming in big numbers. What happened exactly at that point in time? In Sept 2015 you tripled your new customers.
Was this product related or a sales technique that you started applying?
Thank you ;)
Hi Nathan, Thank you so much for everything you share.
I'm particulary interested in how you validated ConvertKit with pre orders (http://nathanbarry.com/saas-preorders/ ) and have a couple of questions:
Is the full landing page still available somewhere? where and how did you lunch that page?
How did you manage the execptations (roadmap, estimates) from those early pre orders?
What's the main reason to jump into this business? did you do any research before entering into this business?
Why did you choose to collect a credit card up front?
Hey Nathan! You rock and I look forward to you hitting all your business and personal goals! I am a little late but I hope you are still keen to answer my question :)
Currently, I am at 180K in ARR, I never read any startup books, business advice or follow any marketing/growth framework.
My questions are:
At what stage I am at "growth" stage? Is this defined by MRR number?
When should I hire a growth marketer? And if I had to do a decision about hiring one, should I even consider someone doing it part-time/freelance? Or make them 100% committed from day 0?
Hi Nathan,
In the interview you've stated you were (and still identify as) a designer..
Going into ConvertKit, did you code the product yourself or hired devs for a rough first draft? How did the very inception/start go?
Thank you for doing this AMA!
Any tips on conducting direct sales calls for developers with no sales experience?
Just do it. Most of the challenge is in picking up the phone or sending the email.
What's your advice for a teen really interested in entrepreneurship?
Make something every day. Too many people are caught up consuming content on the internet. Stop. Create every day. Spend more time creating than consuming.
That's so great, thank you! I actually just bought your book Authority - thank you so much for writing it.
Hey Nathan!
You've built a thriving business in a crazy crowded space.
How much do you watch what your competitors do? And how do you balance building the features you need to compete today, versus building the forward-thinking features that you don't think others are even considering yet?
Email marketing is crowded? I had no idea... ;)
It depends on who the competitor is. MailChimp is so big (and moves so slowly) that when they come out with something big we pay attention. The smaller players (Drip, Active Campaign, etc) can have an impact, but customers will usually let us know by saying something like, "Active Campaign just added this... can I accomplish the same thing with ConvertKit?"
If it matches our vision for the product we'll let them know it's on the roadmap and a rough timeline.
Other companies like Infusionsoft and Aweber have been so slow to move that I don't worry about them. Someone told me the other day that Aweber added everything ConvertKit can do, but it sounds like too little, too late. They aren't product companies so I don't worry about them at all.
You mention that you decided to "double down" your efforts on convertkit and thats how you started to grow. But what was the exact efforts which skyrocketed the growth? Was it the partnership with Pat Flynn like bloggers? Was it some other sales hack? What exactly triggered the growth?
Everyone wants the "one weird trick" but there isn't one. It's a combination of things:
Niche down.
Invest in product.
Get on a plane to land influencers.
Pay them to promote (affiliate program).
If you were to start again today from scratch - what are some of the problems or jobs to be done you would look at first?
Do you think the business ROI of capturing email addresses from a popup will always be more important than internet users' increasing popup-fatigue? Do you foresee any changes to how websites capture emails?
How do you guys at ConvertKit decide what features to build next?
What's been your strategy to understand your users? Do you regularly incentivize surveys and interviews?
How do you recharge when you're feeling burned out/overworked?
Good questions.
I think people will have to find new ways to deliver value. I've seen quizzes do really well for growing an email list. Bryan Harris is doing really well with using free software like ListGoal to grow a list (https://convertkit.com/listgoal). Also great content given away for free will always do well. Hopefully the annoying behavior starts to die down.
It's a mix of customer feedback and where I want the product to go long term. I have a clear vision of what's important to me and that's mostly what we build. Though lately we've been looking at the oldest parts of ConvertKit and rebuilding them from the ground up.
Phone calls and in-person meetings. We also have a tool one of our team members developed internally for tracking all of these requests.
I play a lot of indoor soccer. Like really a lot. I'm on three different teams right now. Next season I plan to play on five.
Thank you Nathan!
What is your biggest fear?
Being a burden on other people. But I go to counseling to work through that. :)
What’s NOT going to change in the near future? In other words, what are some principles you can build a SaaS business on that will still remain true 5-10 years from now?
Put customers first. Care more than anyone else. Speed never goes out of style. Have a longer time horizon than anyone else.
At what MMR did you hire your first employee and how did you know you were ready to add someone on?
We were at $1,500 MRR when I hired the first full-time team member. The difference was that I realized I needed someone who had 100% of their time dedicated to making the product great rather than just working with contractors.
If you buy half of someones time you get a quarter of their attention.
I know you are asking NB the question, but I hope I can chime in as well.
I was very hesitant to hire our first salesperson. I figured you needed to have a ton more MRR to even discuss hiring. However, once we went through it, I realized it wasn't such a big hurdle. For one, you don't need to hire someone that puts in 40 hours a week. Our salesperson is authorized up to 6 hrs/week which works well since she only wanted a part time position.
For anyone hesitating to hire, I say, just do it.
What is the cold email template you used to get your early sales by cold-emailing bloggers?
Thanks!
Here's a sample from one of my emails:
----
Sarah,
Is anything frustrating you with MailChimp?
The reason I ask is I run ConvertKit, which is an email marketing platform for professional bloggers. We’ve got a lot of great bloggers using us like Katie and Seth from Wellness Mama, Pat Flynn from Smart Passive Income, and Chris Guillebeau.
I’d love to hear more about how we can build it to better serve bloggers like you.
Talk soon,
Nathan
----
This post has all the details: http://nathanbarry.com/sales/
Thank you sooo much!
Hi Nathan,
Well done! I have followed your path since 2014 and it has been inspirational. I'm about to launch a saas and have some pricing questions.
How did you come up with the pricing for Convertkit?
Did you calculate onboarding cost or time per customer?
Any other great advice?
Best regards
-Andreas
Hey Andreas! Thanks for following for so long.
At first I had a nice pricing grid with three plans and one of them highlighted. It varied on number of forms/landing pages as well as number of subscribers.
Hiten Shah encouraged me to rework it to only tier on one thing. So we switched it to a slider based only on number of subscribers.: https://web.archive.org/web/20150908034923/https://convertkit.com/pricing/
The design has changed, but it's still only tiered on number of subscribers.
$49 used to be our lowest price, but back in 2015 we dropped that down to $29. Which I think was a good move. We're under pressure to go lower than that, but I don't think we will.
I didn't really calculate onboarding cost... It was more about doing whatever it took to get a new customer!
Thanks Nathan, a competitor of yours has 15$ getting started tier but that also means they have to sell twice as much. Have a great day.
Best regards
-Andreas
How will you think about pivoting when email becomes a thing of the past?
Our job is to get the right message, to the right person, at the right time. That will never change. Only about 15-20% of our product is specific to email. The rest platform agnostic. Email, text, messenger, Telegram, etc. That said, email has been going strong for 25+ years, I don't see signs of that changing now.
Creators will always need to reach their audience and we'll be there providing the best way to do that.
What does success look like to you
Well, I feel successful now. I think the more interesting question is, how do you balance ambition with contentment and gratitude?
I'm grateful for what I have now and where ConvertKit is at. That said I always want to push to be better and grow the company. But I'm here for the journey, not just the destination. So I have big goals ($100m ARR with a team of under 50 people), but work to be grateful for what I have every step of the way.
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