Nathan Barry: Turning $1,000 in $320 Million

how far do you think convert kit can go I think we can definitely hit 100 million year in Revenue this is an absolute master class we sat down with Nathan Barry the founder of convert crit who's grown it from zero to 200 million plus using Frameworks that anyone can copy he very kindly broke the whole thing down for us his monthly Revenue growth from 1,500 a month in 2013 to 3 million a month in 2023 we had this forecast of like getting better consistently and and we did not hit it at all and even people on our team were like are we going to keep doing this like his four-step system to build wealth on the internet and the flywheel framework that will change the trajectory of any business I am following this Playbook with convertkit yeah I think it'll be a $320 million valuation and so this episode is pure gold it's already completely changed the way I think about my own business I really hope you enjoy it if you do please subscribe for more let's dive in okay Nathan thanks so much for coming on the show yeah thanks for having me I thought it would be fun just to start with with the convert kit Revenue mhm so you start this in 2013 and you say you want to hit 5K a month Revenue monthly Revenue in six months yes and then 2013 the end of 2013 you're doing like 1,500 a month yeah it wasn't the the 5K that it was supposed to be wasn't the dream ST 2014 it's still not the dream start we're still stuck at like 1,500 a month in monthly revenue and then 20 5 I think you start it at like 2,000 a month so you made a little bit of progress but this definitely isn't the the the quick and easy way route to 5K a month but by the end of that year you're doing 100,000 in M Mr 2017 you're doing 500,000 a month in Revenue F forward to this year you're doing 3 million every month and recurring revenue and you're on track to do 40 million a year um and the business is worth2 200 million plus how does it feel looking back through those those numbers yeah well I mean it takes a long time for something to get started there's there's this idea uh a friend of mine talks about like show up every day for at least two years because so many people are saying like oh I'm going to create this thing and I work on it for a couple of days you know I work on it like three weekends here and there or a month of of work and it doesn't get traction like oh I guess this Creator thing's not for me and like in my story it's like fairly consistent work for a long time before it gets traction and uh yeah it's it's pretty wild right like things compound turns out yeah and I always had the inspiration of MailChimp which is a competitor of ours where if you look at their story they were founded in 2001 and everyone knew about them starting in 2009 when they launched their free plan so they had eight years of not much of anything I think it might have taken them eight years to get to that first million a year in Revenue like maybe when they laun their food plan they were a little bit bigger than that but not much and so they were grinding it out and now what they're 22 years in they're doing a billion a year in revenue and so it's like okay what if I just stick with this for a really really long time um and so that's that's pretty inspiring I think to keep going on that level how far do you think convert kit can go yeah that's a good question I think we can definitely hit 100 million year in Revenue M um we'll see about the Creator space in General on one hand the Creator space is huge on the other hand it's not that big you own what like 90% yeah probably 85 at this point the rest so you own 85% of a business that's worth 200 million mhm so it's pretty much been boot from the the beginning yeah there's no outside Capital yeah and that is one of the things I think just about you in general which is amazing is you've pretty much documented the entire Journey yeah so for anyone out there who who's thinking wow that would be that would be nice um 30 40 million a year every single stage of the journey is documented why do you why do you do that like I can I can go on barometric now and look at your Revenue numbers today right and I can look back right from the beginning yeah so I always I don't know how the culture on money is here in the UK but in the US people don't really talk about money very much right and so you end up with a bunch of side effects of that one like when I was first getting a job I had no idea what a good salary was right I'd worked you hear people talk about hourly wage you know I worked fast food at Wendy's right and that was for $6 an hour and like you you SE advertised like oh that's for $1 an hour but salaries didn't make any sense to me and so when I was getting my first like salary design position I had no idea what what to ask for I ended up getting that for $60,000 a year which was a a really great salary at the time but I didn't know it would have happily accepted 40 it's just kind of how the negotiation all worked out um because people don't talk about it yeah and so I always wanted more conversation about it to know what's possible and then there was the moment in my journey of building digital products where so I had uh designed to build a bunch of iPhone apps I was doing freelance design and I wanted to build an audience and sell my first ebook and I was starting to think about that and on the same day these two designers Sasha grief and Jared Dale both wrote books about design and they happened to released it on Hacker News which is why combinators like Reddit alternative and then they released on the same day and it was pure chance they did not know each other at all uh and they had entirely different pricing models which is really interesting Sasha sold his for uh like $612 like depending on which package you want and Jared sold his for I think $39 and so then Jason Cohen who's the founder of WP engine thought that was super interesting he like why don't you come on my blog and explain to everyone like how the launch went why you made it and then why your pricing model is better than the other one you know like should you go for a low price and sell a lot of copies uh or should you go for a higher price and and uh you know maybe earn more but sell free copies and I read those two articles and I saw uh designers with small audiences who self-published a book and I went that could be me yeah right like that was the rep representation was perfect there and so then I ended up um writing my own book that after to that handbook and when I released that it made $199,000 in the um you so $12,000 in the first day 19,000 in the first week and so it did about double the revenue that theirs did and actually combined their two pricing models I went for a higher price and multiple packages and then later I came back on Jason Cohen's blog and wrot a guest posted like how my pricing model like how they both had the key ingredients they just needed to combine it um but I think that idea of like paying it forward by sharing the numbers and telling the story is really important and because people see it and go like oh I could do that and even if like he seeing someone who does it who looks like you has things in common with you like that's really really important so like in this case I deeply resonated with um Jared and Sasha because they were in my exact space yeah experience level right it's one thing if we're out here talking about oh I did a course launch and it made a million dollars you're like okay it's not cheap it's not achievable for me now yeah um so Sasha and Jared had this very achievable example for me they had made like seven and 8,000 in the first two days um so even another thing like uh there's a content creator Rachel Rogers who I'm starting a new podcast with called billion dollar Creator and she is this um lawyer turn content creator she's a black woman just absolutely amazing content creator and I know that there's an entirely different group of people that are going to see her story and go ah that could be me yeah right and so part of the reason we're doing the show together um one is we just have a great time every time we hang out like we should record this um but then the other is that we can bring ideas from these different worlds together and so I think in Sharing Revenue numbers you're going to get people who can basically see that and go oh that could be me or even like you're talking about barometric which is our our public dashboard and probably at some point that will come down because yeah it's too transparent it might it might get point it's almost like it doesn't actually in a way it doesn't apply to so many people it's not as accessible what I think is amazing is like you've just given example of you you launched an ebook and I think in in in one day you've made $112,000 right to someone who's listening to this who hears these things what should give them the confidence that they can do that is it something that anyone can do I think yeah I think your co-host is a great example of that right her story yeah so I I think anyone do I think anyone can do it it's very hard yeah the way I phrased the other day on a podcast is it is simple but not easy yeah right the the actions that you need to take are pretty straightforward right of creating very consistently um learning how to package that up uh like we at this point I've seen so many people do it if for convered I've got 50,000 paying customers and so a huge number of them are making you know full-time living up through sums of money that we would just think are absolutely ridiculous um if we were outside of this world and like I see it so often across every single Niche I know that it can be done at the same time what all of these people have in common is like they're willing to stick with it much longer than the average person is yeah and so like the charact like the things you need to do are simple yeah but it is not easy it's just the same thing like like um getting fit yeah it's pretty simple yeah you'll see these threads maybe on on uh Reddit or something it's like oh some people who lost weight how did you do it and it's really like okay well I started you know I changed a little bit what I what I ate and then I added in like short walks and then I extended that you know and like you read it and you in like eight bullet points you be like oh okay that makes sense yeah but it's actually difficult to do that consistently over the you know two three four years that it takes to achieve results but but for people who do who who who are interested in that I think you have this amazing framework which is like the ladders of wealth creation which is to my mind I was reading it this morning it's almost like like the perfect blueprint or a really good blueprint kind of framework for someone who's interested in entrepreneurship and it quite clearly has kind of four levels almost a bit like a computer game yep and if you can complete the levels in order of one another these things become easier right yeah do you want to walk through that yeah yeah so the first thing when I observe something in the world that doesn't that that makes sense to me intuitively but then I try to explain it and I can't yeah that bothers me yeah and so I have these like Flagship essays and there's three of them that I've written thought wealth creation is the first one billion dollar Creator is the second and then Creator fly wheels is the third and they're all something that I intuitively knew or had had observed but couldn't quite explain and so then I dove deep to get to the point where I could explain it um and so lad wealth creation is basically trying to explain how well is made and how it can be a repeatable process and some of these pitfalls that I see along the way so for example like why is it that people often have small wins along the way you know maybe they uh are doing a service business and then they you know figure out how to sell that those services at a bigger scale on the internet and then maybe they do like a a product like a WordPress plug-in that's in an ecosystem and then later they go into assassin app like I had that experience moving through these different stages like why are more people successful that way yeah instead of if they jump straight to like hey let's build a Marketplace let's build Facebook let's build Facebook let's build eay yeah like how many people I don't know if this is still a cliche but with early you know in 2010 to 2012 so many people would be like hey you do things on the internet right I have this idea it's Uber for whatever yeah and intuitively I'm like oh God do not do that yeah right but then I'm like okay how do I articulate this and so that's what the laders is and the first principle basically of the laders wealth creation is that making money is a skill and really it's a combination of like hundreds or thousands of small skills and Jason freed from base camp talks about this of in the same way that playing music is a skill you wouldn't expect to sit down at the piano with no experience and just play something amazing right it's not gonna happen but then we're like I don't know just s like sit down at the computer and make money yeah you like how and so if we believe that making money is a combination of skills and we need to find the environments where you can learn these skills gradually and so that first ladder is basically uh time for money yeah where you are you're working for someone right it could be a landscaping job it could be all the way up through to uh being a professional in the office but the skills you need there are need to show up on time mhm you need to be able to listen to feedback and implement it yeah you know be presentable uh and be reliable those types of things and then in your particular you know for an accountant there's a bunch of particular skills there right but that's one set of skills and that the the income is almost always going to be directly tied to your time that and so there's very this is time for money basically time for money for Mone there's no there's very little to no leverage in that um type on that ladder yeah the next ladder if you move across goes a little bit taller and that's where you have your own Services business and the Bottom Rung on that is like I'm doing freelance work for you could be uh video editing copyrighting design any of these things right but for $20 an hour or $100 an hour it doesn't really matter like I'm doing hourly service based work yeah um I got to learn a bunch of new skills right like I need to uh probably file paperwork with the government mhm like in the US you know if you're filing for an LLC it is absurdly easy yeah once you know how to do it once you know how to do it right but you have to learn that for the first time and and it's super intimidating um and then you know how are you going to collect payments how are you going to invoice basic accounting right there's a whole bunch of skills there and this is just to get our first client yeah right how do you send an invoice yeah um net30 what does that mean you know should it be do on rece you know all of this stuff right so we learned those skills we've got our services business the next rung up from that is um where you start to charge by the project yeah and so this is our first point of Leverage where we're actually getting a little bit of a disconnect between what we charge um and how much of our time we're spending and how much of our time we're spending this is like the productized service yeah so we'll get into that in the next lder cuz there's another another little flip on that but the this R is really important yeah because it introduces leverage yeah so this is you might not be doing the work well in this case the difference is same uh I did freelance web design right um you charge $50 an hour MH if it takes five hours you know it's 500 bucks if it takes that's not the math but you get the idea five would be 250 um but uh I always going to earn at that same hourly rate if I say hey I will design your website for $2,000 yeah no matter how many hours it takes yeah we have leverage we have a disconnection Point M the important thing to realize everyone thinks about and talks about Leverage is a good thing Leverage is neither good nor bad it it just is it's just this thing that will magnify whatever else that you're doing MH so if you're having good outcomes and you're leverage on that great they'll be even better if you bad outcomes with leverage they're going to be worse yeah um and so in this case right if I charge a $2,000 project and uh it takes me 10 hours right huge win my hourly rate is fantastic 4X what it was before if it takes me a 100 hours because I screwed something up well that's on me and I have all of that risk so that has that first leverage Point um and then up from there the next one would be like hiring a team yeah right and so you're doing uh Project based work or hourly work work with a team and then you got to learn the skills of um hiring and managing yeah there's so many things there mhm but then the next ladder is a product as service and I think a lot of people are like what's the difference between service work and product like that that's a very small difference yeah in theory but it's a very large difference in the skills you need to learn and the reason is if I'm running my web design agency I get clients by talking to people one to one so I have to learn here how to sit down for coffee with you explain the value of what I'm providing all of that yeah a product as service I've got to sell it through the internet so I've got to learn how do you make a landing page yeah how do you write copy how do you package it in an interesting way well testimonials matter all of a sudden you know case studies and AR like oh here's what we did for a client but it's like something you could just download and read and be like oh I want that outcome so there's a ton of skills that have to happen there and then the next set of learning is on the delivery of it right instead of everything being bespoke for one client like how do we actually productize the offering um and so those skills of making the offer more repeatable and then um you know selling at a distance yeah those are quite difficult things and then the final ladder is just straight up products yeah right and that could start as simp simple as uh something like an ebook which is fairly straightforward to um to build out and could get as complex all the way at the top is like a sass app or a Marketplace um and then another interesting angle in that is like if the product is being sold into an existing um ecosystem MH so my first products were iPhone apps yeah and like there is a Marketplace there and you can kind of insert it in there yeah um I also have a few airbnbs right so if I I don't have to generate demand for the Airbnb I just have to make a good listing in a good product and I stick it out there and I'm going to me people who are like boy C Idaho for these dates and my Airbnb will come up so you have that it's easier if you're putting it into a Marketplace verus the other thing but one key thing if we think about these ladders building up all the way across what you're going to have is people who have the skills from ladders like one and two and the lower rungs of that who are saying like let's go and Tackle this a Marketplace which is at the very top of the last ladder yeah and then or even setting like even setting an ebook is you're skipping you're skipping the landing page that you've created for the productized service right you're skipping the customer support that you might have had at the agency um all these lesson like it's almost like each lesson each stage has all these lessons and skills that you learn and develop so that when you do the next one you're ready for it yeah and that's not to say that you have to go through every step uh all the way along you just have to learn the skills yeah so if you want to jump from ladder two all the way up to halfway through ladder 4 just expect that there's a lot more to learn and it's going to take a long time yeah and so that might feel really really discouraging and so like this is explaining here's why right you just took this giant leap and it might have taken you three years to work your way through these different ladders and you're trying to do this in one Leap so probably just expect that that leap is going to take three years yeah and be really deliberate about the skills that you have to learn along the way and to be to be really patient yeah you have um I mean I'm I'm basically going through these ladders so I I I I did my like I I had my job I left that and did Contracting yep so that's probably like the pay per hour um and since then I've started an agency um and that's going really well Grant it's like 20K a month um and possibly the next step is uh productized yep I think so um and again I was reading through you basic have like these eight principles that come that really spoke to me um for like working through the ladders can we go into them and maybe start with like one of them is when I had my high paying contractor job to start the agency i' actually sacrifice my my earning potential because I'm investing right uh what I'm what I'm earning into hiring a team right so what are the kind of like eight rules for climbing these ladders yeah well the first thing that I was just noticing thinking about skills right we're sitting down here recording um here in London because of a really important skill that you learned which is cold email yeah right and most people are like oh how would I do that you know what makes a good cold email there's so many terrible cold emails out there remember you sent me a good cold email that started a conversation and I like oh I'm going to be in London right and so now now we're recording um and so that is an important skill on ladder I get ladder two really yeah and a lot of people will not learn that and they're out here trying to scale their sass up and they're like I'm doing Mass marketing and no one will buy it all that right the difference between conver it being at 2,000 a month in Revenue like the one thing that we tweaked in there well a couple small things focus in on on a specific Niche and then send a lot of cold email right so I went from trying to do Mass marketing to very targeted cult email and that you know took us from 2,000 a month to 100,000 in in basically a single year and so like it's really interesting watching you follow a similar Playbook because you picked up on a skill that that really really matters and can we just talk about Cod email as well because what's the difference between content marketing and cod email speaking to how big of the an audience you're targeting you know like are you going one to many or one to one yeah but also isn't there something really important when you're I've heard you basically saying that content marketing is great and right it's a cheat code because if you build an audience and how essentially how you started convert K is you said you already had a Blog email list and you said okay I'm going to build an app and get it to 5K a month in six months and so you you create an unfair Advantage because you have a load of people who are who are following along they're interested and they might check out the product and turn into customers so it's obviously a cheat code in that respect but then it's it also has its downfalls right because people myself include did will think well it's easier for me to make an Instagram real post it to Tik Tok or Twitter or whatever and then just hope that that that that some customers come across me and find me whereas if I speaking to my customers they give me feedback right um in a way that you don't really get with content marketing yeah so especially if you think of a let's say we're making that jump from services to product as Services yeah right a one toone sale right the oneone sale you could do a cold email to let's get on a call you get to tweak the message exactly to you're like oh I can see the thumbnails on your um YouTube videos aren't that great like yeah we offer a bunch of things but I could like I'm going to lead with this one right I can customize it if I have a landing page I Can't customize it there are some tools that you could but but you can't effectively do it yeah at least not easily and so what that means is I have to write landing page copy that is generic if it doesn't feel generic and that's really hard and you don't get any feedback on that landing page copy right someone Clicks in from Twitter or even that cold email and they look at that and they just hit the back button yeah and so like imagine if we're having a conversation you're like hey sign up for my agency yeah and I like just stared at you yeah yeah and without saying anything just like got up and W like carefully stepped over you know past the tripods and and walked out the door like that'd be really rude you're not like you're socially not not allowed to do that but that's what happens every time someone visits your sales page and they decide not to buy they're just like back button no feedback none of that and so that makes it really really challenging and so that's why I like cold Outreach one toone sales because you get to test your marketing copy yeah you get to go okay what resonates you know oh people don't care at all about thumbnails all right maybe let's try this other thing you know whatever it is and you get to take notes and um there's this idea in copywriting that often the best copy is written by salespeople rather than marketers uhhuh because they get to test like I get to actually see the look on your face when I position something this way yeah and I do that you know five times a day across all these sales calls and then I'm like okay I think I'm GNA like try this messaging yeah and that's actually how we came across um all of our messaging for flywheels which is something we can talk about more later but it came from I realized every time time that I was talking to a Creator and I drew out the like broken flywheel that they were operating on now and what it could be MH like they just lit up and so then if you look and we now have videos on this we now have so much um content and messaging around it because creators are like I want that yeah and that came from a sales driven process yeah so that gets us pretty far off of the eight principles but it it does but it's it's interesting because I think you you've also spoken about this where when you're starting convert kit you you have these calls with prospects and you talk them through um what you're what you're planning it's a super insightful process how did you how did you run that there's like a couple of questions that you ask and actually you don't ask which I think is more important because you you let them tell you exactly what they're pain points are um that's super interesting be really great to hear how you run that process of of product Discovery um but also the moment when you then like ask them to actually pay for it yeah so the question I like the most is what's frustrating you yeah so I would start out with this I would collect lead lists in two different ways I would either go for a specific Niche yeah of of content creators and basically you know we're like paleo recipe bloggers are women right like I I can list out all I can't list out all the bloggers but I can list out in that Niche especially if it's a niche that I already have like one or two yeah and then you know I can name drop a relatively small name and it means something in that space kind of the second thing um so in your case that would have been like James Clear maybe or something like that yeah yeah and he he came on to convert K later but um and so later on I had lot of names but uh like you we had a men's fashion blog yeah that was doing well so it's like okay what other men's fashion blogs are in New York City who might have heard of this person and if we're product work for this person it could probably work from there so we basically drew a bunch of these small niches the other thing that I would do is I would look at uh use tools like built with to go scrape the web for uh male users AE users infusion St users and then you know basically grouping people in those two ways then I do send them an email and say like hey um is there anything frustrating with MailChimp the reason I asked because I made this product called con burkit um you know that I started after using mimp and so I just have a a couple sentences and it's used by x y and z um and so in doing that it would usually get a pretty decent response probably a 30% response rate um and but the biggest thing thing is focused on the frustrations and people would say like oh it's it's really hard to organize my list you know I don't know how to like give away a sample chapter of my book and then have an automated follow-up sequence like all the same things that I encountered MH uh and that made do it like a really natural transition into a sales process so then get on the call and then kind of the important point was going to the P from the call we' like talk through the process and then I'd usually be like okay like let's sign up you know let's do this and that's when I lost every single deal yeah like they all fell apart at that point yeah because it turns out it's a lot of work people like oh this is exciting like oh no you know like I'm just not going to do it yeah and I no matter how much I try to convince people like oh it's not that hard and then I like list out what to do and I was like actually that does sound hard you know and so finally one day out of desperation I just said like I'll do it all the whole switch for you for free mhm and they like okay yeah because I think there are a lot of things that you could object to but they pinned all their like all their raisings know on this one thing and it's like all this pressure leading up against a door and then you like o open the door and it just like B to like okay because you can give a hundred reasons why you're not going to do it but to the point of our example right I'm asking you to sign up in person you have to give a reason yeah and that you can't just like hang up the Skype call um now we use zoom but back with Skype and so they gave a reason it was the difficulty of switching almost every time and so then I could take that reason away and say I'll do it for you for free and those accounts were terribly unprofitable right like $50 a month then if you're spending 10 hours to switch over an account even five hours right like our hourly rate on this is yeah but I found that every every account that I got made the next one the tiniest big easier to get yeah right so that compound went from 2,000 a month 2500 to 3,000 to 5,000 up from there and then about like the 15,000 a month is when like Word of Mouth started to kick in and we got momentum um and that flywheel started to spin so in that sales process it was really figuring out okay how can I overcome the biggest objection but an important thing other times I would lead I might actually making this mistake now again actually interesting I would lead with solving that objection yeah and it wouldn't work as well yeah so if if early in the process I'm like hey blah BL blah here's this whole thing here's what's oh and we'll migrate you for free and all that yeah right they're going to have a different objection that might be harder for me to overcome yeah and so the times I had the best success is when I let them pin it all in one objection then I could remove yeah rather than solving that early and then they find something else yeah and they bu some that might be you know I I don't want I don't want price to be the thing that they settle on like that's not so good um so that's interesting we I we might be talking about our con migration process a little too much early on right now but you still have that today which is interesting the white glove the white glove the white white glove Handover I just have a team of five people that does it all it's no longer me like logged into their WordPress and you know site and copying and pasting it switching everything over um let's let's do the principles okay so extra extra time and money need to be reinvested when you're going through these different stages what does what does that mean well so many people if you've heard the phrase it takes money to make money yeah on one hand that's a total copout and it's not true at all and that's some that's an excuse that people say when they want reasons that like they are failing on their their Journey for entrepreneurship on the other hand it's entirely true yeah and a lot of these things do cost money in order to start and so you know in the article I talked about a friend who is building out an Airbnb M right he has this detached garage and he's uh building out into like a studio apartment that he can rent on Airbnb that costs money he got to that point by saving up right so from his his day job and then working extra on the side he is saving up money and setting it aside and doing a bunch of the work himself but without $10,000 to you know over like six months to to remodel that and it can't happen and I remember being in a in an Uber um in Seattle and this guy was talking about why he was driving for Uber and Building Things up on the side and I just I love the story the way he talked about it he was like oh I'm already driving into the office in downtown Seattle and I found that I can usually pick up a ride from the airport and like make this extra money and I was like I love this where's this going like so that he can then start his dream business and he was like yeah and like I I bought a new sound system and I love it and I was kind like oh he's like yeah and after that I'm going to buy like a drone uhuh and I was like oh the Drone so that like we're we're going to do start an aero photography business this is and he's like yeah it's just so fun to play with and on one hand like I'm happy for him he figured out like he loves his electronics and his toys and he figured out how to how to get them without jeopardizing yeah you know his finances and on the other hand like the the entrepreneur and me just wanted like okay but like climb the ladder yeah and he was lots of people are totally content not to so yeah like taking that money right if we're if we're starting a podcast right we got to buy equipment we got to level up right and so take that 500 bucks from the day job and buy the first you know mic and preamp set up and I think there's also does that also applies to at the moment so I also make Tik toks MH and so we just got off of the brand deal but I was one reflection I've had we we said yes to it uh one reflection I had when we actually had to get out the camera to to shoot them and it takes an hour hour and it's probably like high like highly paid work right I don't know there might be like £500 to for this hour um of my time however I'm just creating more work for myself because this is a monthly commitment that I've got to do whereas if I actually spend that hour oh creating a product or a digital product or something that's there for for for much longer that's almost like another version of this in a way right it's like you there's a difference between spending that extra time to earn money versus like um um actually creating something that's going to be there that could give you just cash flow for a long time which is is the same with the your friend who built the tin the the tiny house the Airbnb right he's he's invested his time and money into something that then is just going to perpetually create him cash flow right okay so what's interesting in there there's usually two main things that you can get out of any business venture yeah um the results you know the the skills from it um or and or the I guess I phrase that differently usually two things one is the the money MH right $500 for the 500 pounds for the brand deal um and then the other is the skills from it yeah and I think it's really important to separate those yeah and so when you're looking at taking on this project um or or something that you're building yourself list out okay what do I get from it you have the two columns you know uh 500b these relationships right yeah and then here are the skills okay this my negotia my first brand deal so how's that going to go okay I got to create a contract for that yeah and building that out maybe I'm going to get get my um like Tik Tok recording process dialed in this is going to allow me to hire the editor that you know yeah and then I'm going to scale it forward so being really clear it's not you're not getting 500 lb from it you're getting all these things and it still might not be worth it yeah right you might go like like okay no I don't want to go down that path of just doing branded content yeah and so I'm going to to stick with you know I'm only going to create my own content on the topics that I want because I'm GNA it's going to be slower but I'm going to play this long game yeah and and just be deliberate about it but I think for the most part in the early days just keep creating and keep learning I did a branded ebook for um another SAS platform early on because I felt like it would G me more opportunities to learn and try I ended up not doing anymore after that yeah but um I felt like i' learned plenty yeah so the other principles are like you can skip ahead but you have to learn the lessons from each step I think we already kind of talked about that apply your existing skills in a new way to build wealth um there's a difference between working for a better wage and truly Building Wealth I think that's a really interesting one what is what does that mean well I think a I'm trying to remember what I said in the article but I think there's a lot lot of different ways that people increase their income and don't actually build wealth yeah I kind of touched on this in the billion dollar Creator article where a lot of creators are focused on how do I make more cash flow now MH and they're not actually doing something that's going to build long-term wealth and you need both right like rent's got to get paid yeah and uh we want to be able to go out to dinner with our friends and family and and uh buy our all our equipment and whatever else but I see a lot of people chasing short-term Revenue once they get to a certain level yeah give you an example um there's creat Creator named Mark Cen and when like the paleo diet and all that was becomeing really popular in I don't know 2010 to 2014 something like that um he had a a Blog called Mark's Daily Apple and it was about Health and Fitness Nutrition particularly this Paleo Diet and it got really popular and I estimate that he was making about a million dollars a year off of this at a time when that was just an insane amount of money yeah right I mean that's still an insane amount of money but now I could list a ton of creators at that level whereas at the time there's just you know a decade ago there's just a handful um and he so he's monetizing through through courses I think maybe had some meal plans uh plenty of affiliate Revenue some advertising all of that if you think about a a Blog and newsletter like that it seems pretty well optimized yeah right a million bucks a year something that I argue is he's captured all of this attention yeah and he can direct it like the the course and affiliate revenue is not the highest R Place to direct it and so what he does next I I think is just absolutely fascinating every Creator should study is he goes okay wouldn't it be nice if there was like ketchup mayonnaise and salad dressings that matched the paleo diet and so you're not like oh I'm making this thing from scratch and all of that uh you're just like great I can buy this in the store or I can buy it online uh and it matches my diet so he starts something called Primal kitchen mhm he builds that up gets uses his immediate audience to get the first distribution mhm uh he starts to get it featured like in grocery stores and they'll run like these small tests in a grocery store and what he does then is he takes his email list Geo targets the email list and so it's like okay who on my email list is within 50 miles of Austin Texas where like Whole Foods is running this little test he says like hey guess what like Primal Kitchen products are now in this whole food like go buy it and he talks to the grocery store W like oh so you guys ran that test how that how'd that go yeah it's like amazing we sold out you're like well yeah because I just emailed like 5,000 people and said go buy this right here and so they spread to more stores and and on from there within two years he sells it for I think $150 million wow so when you think about what is the highest Roi place you could direct this audience yeah you're like a million dollars a year that's incredible yeah nothing compared to what you could create and this is the same Playbook that years later like Ryan Reynolds uses where he's going okay I could be the spokesman for your product and you'll pay me 500 Grand a million dollars or whatever and the the hourly Roi on that is insane right he's like just have to show up record for a day shoot some commercials get paid I assume a million dollars and walk out he's like let's do this all the time this is amazing yeah but instead he looks at it and he like wait a second if you're willing to pay me a million dollars to do this thing it has to be worth more to you like you're not an idiot so how is it worth more to you it's like well this builds the brand gets in front of a lot more people and sells a ton more products and so he's like cool I'm only going to do that for products that I own now yeah and so Aviation Jin mmobile right these are companies that he uh bought a portion of and then scaled his own with his own face and attention to marketing and then exited both of them for Aviation gin was like 7800 million yeah something like that and mmobile he sold for 1.3 billion and it's like oh okay that's the billion dollar Creator idea that's is it and when you look into all of these people it's like McGregor Jenna uh they've all run this this this this Playbook and then we're we're starting to see like amazing creators there's the gardening um guy Eric I don't know him I can't remember him but like you have to send me the example and you kind of like got these traditional Stars doing it and you've got these like out andout um kind of digital first creators if you're if you're like a a Creator who's who's up and coming how how should you think about building your fwh and why is it important as well because I've got a really good friend who was a who was a YouTuber who grew his channel to 900,000 subscribers and then completely like fell out of love with it burnt out and he'd spent all these years building this channel to a level and then he's all of a sudden got nothing so I think they're also quite important in in a way for like diversifying away right from you being reliant on brand deals and YouTube AdSense right oh man there's so many different directions we can go in this so so first there's tons of examples like we can name all of the big ones right um you know like if you look at all of these actors and musicians most of the wealthiest ones are not wealthy from their you know salary for the or what they sell in records or what they got paid for the the TV deal yeah right George Clooney with casamigos tequila right you know you get a I think he cleared 300 million or something in that exit um there's tons of these examples and you can apply that in the same way like it's happening at every level yeah I am following this Playbook with convertkit yeah right I could be selling digital products and all that I chose to sell SAS SAS and you were making 200k a year selling selling eBooks yeah so and you could have kept doing that quite yeah I think I I could have gotten that business to now probably about to a million a year yeah um like looking at what other people have done that's 500,000 would be pretty straightforward and a million um would be great but now like if you think about the the Enterprise Value created from convertkit um we did a small secondary round and team members sold shares two years ago at a $200 million valuation we'll do it again um later this fall and I think it'll be a $320 million valuation and so it's just it's on another level uh Rachel Rogers my co co-host she's doing the same thing with her um uh coaching and speaking business instead of doing on a small scale she's like okay how do I create something that's worth you know tens and ultimately hundreds of millions and there's these structural differences that that you make in it so that's one thing that I think is interesting you brought up the the other side of it which is like the sustainability yeah and that gets into this idea of a flywheel do you think your audience knows what a flywheel is should way well break let let's break it break down okay so uh the idea behind a flywheel is it it works actually in physics and it's taking continuous momentum so years ago I was in lutu which is this little landlocked country inside of South Africa um and we were working on to install well at this orphanage and because electricity was pretty inconsistent in in list to and whatever that was 2008 uh we decided we wanted to install a pump that wouldn't require Electric so you think normally you have a hand pump on that yeah like that's what we use at a campground you know something like that that's fine for the weekend that's not what you want when like 100 people are relying on this for their main source of water and so instead what we installed is a flywheel which is like this big heavy metal wheel that sits on top and what's interesting about a flywheel is instead of this up and down motion of a pump where there's a direct correlation between how much effort you put in and the results that you get out instead it's this continuous circular motion and when you start like when I was turning the flywheel to get it going uh my friend Luke was on one side and I was on the other and we're both like it's hard to get started like we're we're braced we're pushing we get it going after it gets some momentum it starts to get easier and then he can step away and I can keep spinning it and then I can drop down to one hand and then eventually I can keep it going basically just with a couple fingers yeah and and it's just it produces a steady output so basically three laws of a flywheel as I Define it first is that um each step like flows smoothly into the next it's a continuous circular motion the second is that it gets easier with time MH uh and then the third is that produces more yeah with time and if you think about those like laws two and three in particular it kind of sounds too good to be true right you're like you know you must be selling something right this you're saying it gets easier with time and prod more yeah like there's no way but this works in real life physics um and it it definitely works online um and there's a bunch of examples of it but the reason that I think like you talk about a friend doing YouTube and getting to 900,000 subscribers and then burning out is because you can get to these levels through a lot of hard work on scattered things yeah right what are you gonna do today you jump in like okay I guess let's negotiate this brand deal and let's record this YouTube video and let's start a podcast every day yeah tons of effort and um if you are at the pump every day for a long time then you can get the results from it yeah and it's probably going to cost you a lot yeah and so what I think is fascinating is the people who Implement flywheels and get just some pretty crazy results so if we go back to um the direct sales example yeah right for con burket there was a flywheel operating there I didn't know enough at the time to describe it as a flywheel but now I can see it where every person that I reached out to yeah right then um I'd have those sales calls and I'd be refining my marketing copy and learning on there I would then the deals that I closed I would do the coner migration that would get me another testimonial another name yeah I would ask them for referrals which would then give me more people that I could re reach out to and oh and and then I guess somewhere in there I'd use them the money earned to make the product better yeah right so it's pretty simple instead of like okay I'm going to do this type of marketing and we're over here doing this and that I was like nope direct sales in the flywheel and I'm just going to keep turning that and it was really hard at first but then each rotation the product got a little more a little better I had a little more credibility from another client I got better at the migrations um and you know I I closed more deals and so I got a point I got easier and easier and easier Word of Mouth kicked in referrals got better and on from there another example would be let's say you write a Weekly Newsletter you got to come up with content for that yeah every week and that gets pretty tiresome M or like a YouTube idea right like all of this gets tiring and so you can there's a flywheel you can Implement that gives you endless content ideas and it's actually really really simple and with kind of the interesting thing is a lot of these flywheels are very small tweak yeah from what people are doing now yeah so we have new subscribers coming into our newsletter when they come in they're getting some automated emails yeah say email two or three somewhere in there it's like all right we're teaching in my case right teaching you how to design iOS apps yeah in one of those emails I'm going to ask a question hey what's your biggest frustration with learning how to design iOS apps yeah hit reply and let me know yeah right two sentences in an email and that is what like turns this into a fly so it's very very simple when people reply they're say like oh I was trying to set this thing and interface Builder and it didn't make sense I was ex code and I'm so confused and blah blah blah and that reply I have going into a label in Gmail or you could use zapier and put it into something fancier or whatever then when I am looking for something to write I go into that label in Gmail and I'm like uh that one seems interesting and I write an answer to that and then that goes out to my newsletter and get published to the web which helps me get more subscribers so it goes around so the more subscribers I have the more responses I'm getting the more content ideas I get that's reaching more so it's getting easier with time and then also the bigger the audience gets each story is going out or each uh essay or whatever is going out to more and more people so I I am both you know have a continuous loop I it's getting easier with every rotation and then it's producing more with every rotation yeah and that's what takes it for me from Shoot how am I going to create content every single week to like it's like mean it's it's like the difference between starting from zero every day yeah to having that like you say you're you're already on level two level three level five level 10 like every day you've already got like all of that years work working for you already it's an amazing framewor yeah and so I apply flywheels to absolutely everything and uh that's just one of one of those Concepts that like once you see it you can't unsee it yeah and I'll spend all this time either on paper or um I use fig Jam uh which is from figma you know just like a whiteboarding tool to just like try to sketch out as many different flywheels as I can another example of a flywheel someone who does it really well with a Creator named sill Bloom yeah and I talked about him in the article he is laser focused on getting to a million subscribers with this email list and that's one thing I'll point out a lot of times when people mess up a flag wheeel it's because they're trying to have it serve too many goals yeah so what's the goal the five okay so this flywheel it should make me money it should grow the audience it should build my reputation and you're like okay no no a flywheel should have one job in this case s's flywheels job is exclusively to get subscribers yeah and so what he does is he starts off with content on social so Twitter Instagram and Linkedin are his three main channels and then he is driving those people into his email list through uh lead magnets optins things that he's giving away M and then after that he has something called The Creator Network which is a conver offering where we let you pair up with other creators and recommend each other after the sign up yeah so what that means is that when you sign up to his newsletter he's like hey thanks so much for subscribing why don't you also check out James Clear Ryan holiday and Tim Ferris you know why would you do that yeah well because when someone signs up for James clear it says thank you so much for subscribing why did you also check out s Hill Bloom mhm uh Ryan holiday and Mark Manson yeah you know and so they're sending each other thousands of subscribers every day and so they're growing like crazy because of that so he has just doubled the effectiveness of his traffic right there but then as someone goes into his email flow he's sending two emails a week and convert kit through our sponsor network is selling advertising on his um on his emails yeah he is then taking all of that money that he makes yeah and he's reinvesting it into and this is why he's like our ideal customer into another product of ours uh which is our paid recommendations Network yeah where you can go on there and say hey I'll pay $2 for every engaged subscriber that another Creator sends to me and so he's going on there saying hey I'll I'll 25 Grand a month you know I will uh put it up there send me subscribers I'll pay for them and that completes the loop because he gets more subscribers so if you think about this right we have a perfect Loop it goes all the way around and turns it starts really turning really slowly if you think like okay what does this produce in a month the first rotation maybe he's got 100,000 subscribers on the list uh like which is what he was at when he set this up maybe he's making $10,000 a month in sponsorship revenue and so at $2 per subscriber um he's making getting 5,000 subscribers right so that's that's decent but now he's got 500,000 subscribers on the list he's making $50,000 a month in sponsorships right like that's 25,000 subscribers that he's paying for and so you have the Snowball Effect where it's just producing more and more and so just uh from January or I guess last December to uh the beginning of September when we're recording this he went from a little over 100,000 subscribers to 500,000 and he'll hit a million in the next six months or so because he's just laser focused and this just keeps compounding and then also you know the faster his list is growing the other bigger creators he can partner with yeah because he can send them subscribers so it's like this infinite game that he's playing and it's like just totally everything cycling around it's brilliant and it comes down to that laser focus um and even when you're talking just now you you you've you've made me think of another like framework that you have which is the strip mes the skyscrapers because you've just listed off like five different products within your product that are all uh part of convert kit right so you've got your sah is running his email um email marketing software he's got the automations he's got the automations he's got the sponsor Network and he's got the referrals which is spark Loop y yeah which company we acquired back in the spring so you've created like this be him off this skyscraper right but your alternative was like you could have created maybe five or six different things or spend some time on the ebooks or how do you think about that that framework yeah well I think there's the idea that people talk about of being a Serial entrepreneur yeah right like uh and it's a a point of Pride to say like oh I've started 10 companies you know I've done all these things and something that I often think of as like if you took all that effort and put it into one company how big could it be yeah now there are people who start a lot of companies and do it really well sill is actually one of them um and what like his whole game that he's playing is fascinating we could get into that more later but um I think a lot about building this one thing into a really tall skycraper and so for convertkit there's a lot of ideas that we've had mhm that would increase the footprint of the product and be like okay we're over here we're over here that I've resisted over the years because it would take away from the skyscraper idea and so now these additional business units that I've built out the only reason I did it is because I know how they fit together in the flywheel right in this case sill has an insanely successful flywheel and we're running every step of it yeah and we can make more money at each stage and he's thrilled because he's getting more and more results and so like our sponsor Network you know one hand it's crazy we're a software company basically started an advertising agency of like we will go sell sponsorships on your behalf like why would we you know yeah that doesn't get the same multiples you know for valuation and it's not as reliable and you know like the end of last year the ad Market took a big up and like when Silicon Valley Bank melted down um a bunch of advertisers like pulled out and that's a level of volatility that we don't have in the core business um but we realized that this fits in really well right if someone's thinking of switching over and they're like oh $500 a month like oh that's kind of expensive for my whatever 80,000 subscriber email list I'm not sure if I want to do that we're like we can sell at least five grand a month in ads on your newsletter and we'll guarantee that and they're like oh done you know and so not only do we easily win their subscription yeah Revenue uh but then we make more money you know off of a 20% commission for selling their ads yeah but then the goal is to switch as much as possible from people thinking about like I pay convertkit yeah and we want everyone to think about convertkit pays me yeah and that that's so powerful and so all of these things fitting together really closely in an integrated way uh is our own fly wheel uh and then you know that build into a skyscraper instead of a very scattered strip M yeah it's a quite a compelling offer isn't it yeah it's your kind of Alex your kind of no-brainer million dollar offer yep uh yeah it's fun just how it's all come together because the business is fun different than it was a year ago right like basically exactly a year ago is when we launched our sponsor Network and it it going going back to the idea of sticking with something for a long period of time yeah right like we have some really good months and some really bad months and it was all around and even people on our team we're like are we going to keep doing this like we had this forecast of like getting better consistently and and we did not hit it at all uh and so there was a lot of reasons like okay try to experiment shut it down but I know that first two-year Revenue graph and I think I'll make this analogy sometime for the team is like overlay the first two years of convertkit and then the first year of our sponsor Network and obviously the sponsor Network's way bigger from a platform but it but it's this like inconsistent yeah not an obvious thing to stay with m uh but I know that like I know this can work and so like figuring out the Dynamics of it and being really patient the way that I think about it is uh someone just told me this the other day um of you should be impatient with action yeah and patient with results yeah that's really nice and so that's the way that I think about I'm like I'm very impatient with how do we get this up how are we selling deals getting money to creators and all of that but when it's not working right away I'm very patient and so actually this month um well I guess August the month we just closed was our best month for the sponsor Network by far and we now have the sustainable Baseline of recurring deals and all of this where it's like okay we're not going to jump around that's we're actually selling things really meaningfully yeah and it took you know 14 months of experimentation and everything to do that even at our scale of you know millions of months in Ran now what have been the worst moments uh voting this and oh man um I mean there's a lot of times where like losing team members MH there's definitely people that you build really close relationships with that either need to move on for their own reasons or like they're not the right fit for the role yeah uh in the company more and that's really hard there's plenty of cases where the company grows faster than the individuals yeah um so so that sucks there's uh plenty of things over the years you know in 10 years of running a company you you compete with a lot of different companies yeah and there are times in that where it's like oh like are we going to come out on top who knows um other worst moments there was uh a whole thing I wrote an article on this on rebranding the company yes um and uh if anyone wants to read it it's on on my blog Nathan b.com and it's titled they and back again which is a little nod to uh load of the Rings but um and like the the story of like rebranding the company to Sea and then branding it like changing it back um I still have a $350,000 domain there um if wants to buy se.com I've got that you mentioned sahill earlier um who who are the creators you look at at the moment who you think wow they are absolutely killing it or they are really like playing this game well yeah a phrase that Rachel and I have been using on our podcast is who's playing chess when everyone else is playing checkers yeah and I'll give you two quick examples of that one is sahill because I was interviewing him actually at craft and commerce we're doing this workshop and I was talking about flywheels he's like you know you keep talking about my flywheel which he and I designed together and and all of that um you know as I earlier described it but I think of that as like my micro flywheel the macro fly and everyone else is like what yeah this is uh they're like they thought that was a flywheel at a huge level and they like micro fly wheels for how he runs his content and all that he's like no no the actual macro flywheel that I'm doing is basically the billion dollar Creator Playbook and what he's done is he looked at everything that he was spending money on yeah right Amazon has this idea of turning cost centers into profit centers yes uh and so they drive the bulk of their profit from Amazon web services uh which convertkit contributes heavily too um and that was them saying hey we spend the most money on web hosting yeah and servers and so let's start we've built all this great infrastructure let's sell it and turn this cost center into a profit Center and now it is like many many billions of year in profits um and so s said I want to do the same thing for uh my business and so he went and looked through everywhere that he was spending money uh video editing Clips um newsletter growth uh copyrighting design all of this and he started he started a agencies in those spaces and there's this thing so I guess first with an example with an agency what he realizes with design for example he'd have his carousels on LinkedIn yeah right desig something out really well and then as you flip as you flip through the Carone you get to the end of it it'd be like oh it's not for a newsletter and all that and if you flip one more slide that says if you like this here's the agency that made it yeah and it's an agency that he has and he'll post a link in the comments as well and it will drive a huge number of leads from his audience because people are like oh I want like that was really good I want to copy it and have that too um there's a thing I don't know if it's that thing in the UK but in the US you get travel hackers uhhuh Yeah so basically it's if you're sitting on an Marland flight and like United comes out and they're like sign up for the United Mileage Plus Explorer card or whatever you could get two free flights and most people are like sweet I'd love two free flights and there's a type of person that goes what happens if I get more than one credit card yeah what if I get 11 credit cards what if I you know and like how how could I play this game for never pay for a fly ever again yeah um which 100% works and it's fantastic and uh yeah I love it sahill is that person for agencies most people are like okay I have this audience and I could use it to drive leads my for my agency yeah and he goes agency singular yeah what if I start at 11 yeah and that is exactly what he's done so he has all of these different agencies right so our mutual friend ali abdall uh has a a YouTube production agency called Hey friends yeah with sahill sahill yeah um and there's a just a bunch of these sahill and I started a newsletter growth agency together together called paper boy MH um because so people were coming to us and saying okay what do you do what are these playbooks how you implement it um and we'll teach it and talk about it endlessly on podcast but then someone's like can I just pay you to do it yeah it's like okay so we hired a CEO we scaled that up and so sahill is getting to the point where be across these agencies he's got operators on each one so he is not in the Weeds on any one of them yeah and it's just absolutely massive like the the revenue if you think of okay if you've got a 500,000 subscriber email list and a million followers on Twitter what is the most Revenue you could generate like okay well sell a traditionally published book let's get some uh some courses going and all of that and he's using his private Equity background he's like no let's just start companies yeah and these they're going to be like my prediction is that uh within five years s agencies will be doing over 50 million a year in Revenue yeah phenomenal um probably more so that's one example um love that another example I see chess one of people that playing checkers like uh Ryan holiday is very very prolific yeah it's interesting is both like s and Ryan neither of them work they're not like grinded out people maybe they were at one point but now they know like what's high leverage and they get their writing in and and they have like pretty flexible uh days and all that he just goes out on the farm doesn't he with his GoPro and do some writing then goes out the farm it's GoPro yep and then like turns turn turns it back on him and goes like okay so stoicism um no so Ryan was talking about uh something on a podcast that I'd forgotten about that uh Tim Ferris actually owns the audio rights to um the Obstacle of the way interesting so like how does that come about and there was an interesting moment in time where audible was getting popular in audio books were getting very popular but Publishers didn't value them yet okay and so Tim and a few other authors had these early numbers being like wait a second there's a lot of sales yeah coming in on audio yeah and there were these books where the audio writes would get sold in a bundle yeah and then not um like the publisher wouldn't exercise them and they'd sell them off to someone else so there's another author Josh Koffman who uh he talked about um he writ the book called the personal NBA yeah and he sold all the rights to it to a publisher as you normally do and then the publisher turned around and sold the audio rights to somebody else and then they were going to like sell someone else he's like can I just can I buy those back and so he bought the audio wres back um published it himself on Audible and it took off and audible had this deal where they would pay you for every X number of units you sold you get an incremental higher percentage of each copy so wow so it got to the point where Josh was making 50 to $60,000 a month off of audible because it was a very popular audio book yeah and Tim understood this and so he went around buying the audio rights to all of his favorite books brilliant and including the obstacles to way because the same thing we like oh this is a niche book people aren't going to care about it you know is even worth me you know all of this and of course it's now sold crazy numbers of copies and so I think looking at these examples of creators finding something that is currently under underpriced and undervalued and saying like oh I want to own the equity in that yeah right so Tim is is taking money he's making from royalties for you know his 4our series of books and then saying okay what else can I own with that you think that's crazy that like another author owns the audio rights to all of these books and like he's just paying a huge amount of money and so I think that's interesting I think also Ryan holiday has this crazy back catalog of books yeah where oh I guess he's making $200,000 a month or more off of just the the book sales from his back catalog yeah another example uh Ryan so Ryan lives outside his farm is in bastrup Texas which is I think maybe 40 minutes outside Austin yeah he's very very rural and uh he started a bookstore in Bast Texas and like how much could a bookstore in a small town actually make yeah well Ryan sells a lot of books yeah but he most of them on the Internet yeah uh and so he is plugged in with through his bookstore he's plugged into the um book reporting thing so that sales through his bookstore count for like the New York Times bestseller less and all that interesting in a way that like Amazon and other sales sometimes do sometimes don't it's a little complicated um so normally if an author was like Hey I'm going to sell all these books through my own site yeah they need if they want the books to count yeah towards the bestseller list they need to sell it through a bookstore yeah which means more money is going to that bookstore yeah so that is 100% true in Ryan's case as well he just also owns the bookstore book store yeah and so he's like okay I'm able to do this uh and like cut out another step and make you know another dollar or $3 per book CU he is both the author and the Book seller and guarantee he's top of that list as well yeah oh it definitely helps and so you'll watch him do when he has a book coming out he'll be like okay we're sign selling signed special editions if you buy it through the painted porch Bookshop yeah versus if you buy it on Amazon where like you just get that right so driving way more sales making higher cut of each thing um another example I'm a huge Taylor sweat fan yes and she is absolute genius in all of this one quick thing in my billion dollar Creator article which I wrote maybe 2019 or something like that I have a line in there where I'm talking about how at the time her net worth was 300 million oh my word w um and I talk about how like no amount of Music sales and touring is going to get her to that billion dollar level right she must have read the article and I I think she read the article and took it personally like if you watch the Michael Jackson Michael Jackson Michael Jordan documentary and I took that and I watch that and I took that first I think Taylor that after reading the article cuz she's now at two billion in ticket sales just for her T yeah which is insane but the thing that she just did so there is a um it used to be let's see when a when a film goes to theaters there's three groups involved in that you have the the production company that actually made it the distributor and then the theater yeah right so you could have Pixar Disney and then AMC right whoever the theater and all that um the production and the distribution are allowed to be owned by the same company yeah but until recently uh the distribut the the movie theater could not and there was a court case in the United States that changed that a couple years ago so now in theory someone could own the whole chain and it's sort of starting to decouple a lot um a bit of this and so uh Taylor Swift with the Aros to were filmed it cost between 15 to 20 million to produce a movie theater level experience of the show and this fall she's launching it in theaters but what's really interesting is guess what she is the producer and the distributor and so she didn't go through any usual production companies and she went straight to the theaters and so she's making more on every pazale so not only you know is she still running the show worldwide right that do this tour and it'll be I mean it'll be more than 2 billion Revenue but then also you're going to be able to pay 15 bucks yeah at the movie theater and a huge chunk of that is going to go to her because she cut out more more of these middle people and so I I just see that I'm like chess when other people are playing checks all these other people they basically all they' they' they've drawn out their business or their industry and they just ticking off every every element of it I'm going to take that in house and take control and side note that podcast AC is it acquired they do the tennis fifth episode oh I haven't listen to that one absolutely amazing and just the you know the way that she re-recorded those all those tracks when the rites were bought like that was a that was a chess move again yeah well well and then um but what's interesting is it didn't necessarily seem like it at at the time like it really seemed like she was backed into a corner on that one of like oh you don't even own the Masters for it to bring so to bring ran Reynolds back into it um right so he and Blake Lively his wife and Taylor Swift are really good friends and so Ryan Reynolds has this production company called maximum effort and so they'll turn around these amazing commercials and they'll do it really well in some really timely ways so for example when um uh pelaton did had this TV commercial that was a huge flop yeah I remember um they immediately I think within 24 or 48 Hours like it was really fast recap cast the same actress in an aviation gen commercial yes and like had this crazy up like building on that uh and then they also did another one for pelaton where more recently when in the TV show Sex in the City they killed off a character for having a I think a heart attack while riding his Paton and then they quickly made a a commercial and and like because pelon's like losing market cap and then they they reverse that um but something was really interesting is uh Maxim effer did an ad for match.com mhm um called 2020 a match made in hell that uses Taylor Swift's Love Story interesting but Taylor's version and so it was the very first um like TV commercial to use the re-recorded master of it at a time when that's what everyone was talking about and so the so mash.com comes up with this super funny commercial yeah that uh is timely because it's the first thing to use these re-recorded Masters and so it gets talked about even more and so I just love these examples of people like playing on um you know what someone would already talk about and so like how do I make something that's that's great production quality and right wave that's happening it's timely yeah yeah it's the it's the it's the fundamental to I mean when we work with our podcast with with podcast whenever something is timely it's like let's go get that out there get out there and they always do the best they always do the best did you get an offer from Spotify I yeah we did what was how like how did how did that happen and how did you deal with it yeah uh Spotify reached out it was at the time that they were um really focused on podcasts and trying to ramp up in that way and they reached out because I I kept thinking like what what does Spotify want to do with us yeah and we had bought a company called fanbridge which is just email marking for music M and so I was asking them like oh is this why right we picked up a bunch of musicians um as customers and and so that was really good for our brand and customer base and I was asking him like is this why you wanted to wanted to talk and they're like that's how we got on your radar yeah or the reverse how yeah how we got on their radar and they said but they what we actually care about is your podcasters I like oh okay okay why is that and they just explain it to me they like when someone goes on Spotify and plays a song we have to we pay the artist the the writer you know whoever owns those Masters uh the like it's a very long list of who get paid often there's many often there's many writers that get paid you know so it's like lots of money going there someone goes on Spotify and plays a podcast we don't pay anybody right like but both are equally good at driving premium subscriptions to Spotify and so what I realized I was like oh okay and that's when they went and bought gimlet and anchor and did the deals with oh you know with Joe Rogan with the Obamas and um just kind of on on from there and so it's right during that time and they basically wanted to build out like all the podcast publishing that whole ecosystem um you know we have people like Pat Flynn and um Tim Ferris and a bunch of others that Cody Sanchez and others who are running really successful podcasts and so they're like this gives us another way to acquire them and provide more services to them um and so we never got to like a formal price and all that we're talking the $200 million range yeah and ultimately what I decided like I always said like oh we're not going to sell we're not going to sell and uh I was like okay I gota this is I gota actually like sit down and think through this yeah and journal through it and basically what I decided is like no like if this business is valuable to them it should be more valuable to me yeah and uh have too many ideas and so we kep building it up and then that's how from there I actually had people who on the team who were like what we're not going to right because it's a brand name you can sell to a great exit uh and so that's what how we had to put together a secondary round yeah cuz I need I I wasn't like contractually obligated to but you know I felt the need to like give them away to sell some of their shares yeah um and so I thought like turning that down actually resulted in like some huge changes in the business interesting because there were like three or four people who had thought like I always said we're not going to sell we're building for the long term but they thought they yeah to yeah and so when that offer came and I said no they were like oh yeah okay so how do you um how so how at the moment do you did you how did you um how did you make them happy well I mean you you can't make other people happy but in that how did you come to like answer that a little bit that was like said like you can sell some some some stock and then do you do profit sharing or something like that yeah we do profit sharing as well so basically we we created a market where um basically friends of convertkit could come in and buy shares yeah uh and then team members who want to could sell shares yeah uh and so that that worked really well and we basically said okay this is our new model going forward we're going to do it every two years yeah um and so we'll try to have the benefits of being publicly traded without the downsides of like a real-time stock ticker and um you know the complexity of going public and everything so yeah that's that's actually worked out really well handful of team members uh left and moved out other things and you know we hired great people uh to replace them and and now people are like if someone says oh he's never going to sell so like yeah he probably will team members are like no like he means what he says this has been amazing I've got some some quick five questions what's the best thing you've done with your money oh uh best thing I've okay I'll give like couple couple quick answers a few of my favorites truly the best thing is I sold a little bit of myrent convered stock um two years ago mhm sold one and a qu% for $2 and5 millionar and I retired my parents and my wife's parents and so that was S one one and a qu% two and a half million it was ridiculous um another fun thing uh two quick fun things I just did the uh behind the scenes like VIP tour at Disneyland cost like four grand skip all the lines super super fun I just did that at Disneyland Paris With My Team uh a couple two three days ago yeah on Friday uh and then my favorite new thing is I've been learning how to fly and I just bought an airplane which I haven't seen yet because it got delivered while I've been in Europe for the last week uh but it's a a little five seat serus and I'm very excited to that's quite F so there there's your rapid fire list of three things yeah uh best advice you've ever received uh stick with things for a long time results take way longer than you think they will what gets you fired up oh uh helping create make money like the number of times that you see someone like make their first $1,000 on the internet and then they like something clicks Give an example uh there is a newsletter that I wanted to create a local newsletter in my city um so I made one called from boisey and I hired this editor uh her name is Marissa and she was an experienced content producer but new to like this Creator newsletter world so I hired her gave her the the idea and and and PID her to run it and she ended up like breathing life into it in a way that I didn't even expect and like just making it amazing and so now people think entirely of it as her thing and they like kind of know I'm involved but um and so it exists exactly way I wanted it to and she made it way better and so I like made her a 50-50 partner in it and it's running really well but there was this moment where she came to our event to craft and commerce and before that she was listening to my podcast and then she met people there and you could just tell that like she kind of understood it before and then afterwards like being immersed in this world it just clicked MH and she's like now closing sponsorship deals and she launched her like a paid Community um as part of it and like it all came together and she texted me the other day and she's like hey we sold $28,000 in sponsorships uh in the month of August and some you know for future months too but like that's what collected in that month I was like Marissa that's in say you know and so yeah it completely fires me up to see people Implement these things uh cuz once it clicks like these creators are just Unstoppable I think Jack buter says that make $1 on the internet and they would just completely like unlocked a new paradigm in your in your brain you're like what the first time that you wake up yeah and you're like I made money I didn't do anything I didn't well I did but like um top free books oh anything You Want by Derek cers um oh the Lord of the Rings um what else oh there's so many books uh what else did I put in there I think uh rework from base camp is really really good yeah we'll go with that list cool uh favorite podcast oh I've been listening to fewer podcasts lately I like switched over to Audible and yeah I've just been doing a bunch more audio books um an audio book I'm listening to right now is only the paranoid Survive by Andy Grove which is like you know old school Silicon Valley um oh let's see I really enjoy the reboot podcast um I guess I'm wearing their shirt today um my first million yeah Founders is really good uh yeah that's probably the higher level list great and where can people find you yeah my email list is at Nathan berry.com um podcast is just search for billion dollar Creator uh it'll probably be out by the time this releases yeah uh we're doing a multi City Tour to launch that so that'll be a lot of fun uh New York Nashville Austin and we'll probably pick up a couple more cities uh maybe Atlanta La um and then convert kit we we power all the biggest newsletters in the internet so uh if you're looking to make money and build an audience convert.com as a place to be amazing I love this thank you so much naan yeah thanks for having [Music] me

Channel: Callum McDonnell

Views: 5,141

Keywords: creator economy, podcast for content creators, podcast content strategy, social media for podcasts, nathan barry, nathan barry converkit, entrepreneurship, make money online, how to make money online 2023, creator business, software business, how to start a software business, how to build an audience, how to grow an audience, what is the creator economy, creator economy youtube, sahil bloom business, sahil bloom, convert kit email marketing, convertkit founder

Id: ArZ-wCFsMwE

Length: 88min 4sec (5284 seconds)

Published: Sun Oct 22 2023