- I wanted to be a creator
for two different reasons. I always loved to make stuff and I had this idea early on of like, if I can get good at making money, I can take care of my family. I won't be a burden on anyone else. Almost two years into the company, I started to get this rash on my leg and I go into the doctor and he's like, "Yeah, you have shingles." I couldn't work, I couldn't take care of kids
in the way that I wanted to, and my brain was just completely foggy. So I got really depressed. All the things that I
thought I was good at, I couldn't do anymore. The company just kind of stalled out. We're at the point where, like, we're down quite a bit
from our peak in revenue. It really came down to like
shut it down or double down. - Oh. (Nathan laughing) 'Cause I don't like being
the center of attention. We've always had it where
the creators are the heroes of the brand. And so I always wanted it where like, let's tell the stories of the creators and who we serve rather than my story. And I remember thinking so many people at ConvertKit are creators themselves and it's built by people who know what it's like to
live the creator journey. And I was like, all right. Yep, that is true. That's my life. I was born in a little, some
we call it a tiny house. Some others might call it, like, a shack. My mom and dad were saving up money to be able to build their dream house. So I grew up in this
environment of scarce resources and a willingness to be like, all right, well, let me
figure out how to do that. Let me ask someone, let me get help. Let me pull together a community
and let's just try things. A lot of other people that I
encounter in life are like, "Oh, I can't do that. I don't have that skill." And so much of the creative mindset is, like, I don't have that skill yet. I have wanted to be a creator
for two different reasons. One is that I always loved to make stuff. I also loved woodworking and the intersection of
something that I made and then being able to make money from it. And so that then translated
into computer graphics and learning Photoshop
and web design and logos and on from there. But it was all about how can
I make money as a creator? I grew up in a family where
money was always scarce. My dad ran a Christian bookstore that was supported by donations. We always had food to eat, but there were a lot of times that, you know, there wasn't
money for much else. And I just watched it always
be like a constant source of stress in my family,
particularly between my parents. They divorced when I was 19 and that was something where I had this idea early on of like, if I can get good at making money, I can take care of my family. I won't be a burden on anyone else. I remember thinking I'd
love to teach, you know, everything I know about
designing iOS applications. And the whole point of the book was that it would position me as an expert and who else do you wanna
hire to design your iPhone app than the guy who wrote the book on it? I put the book out there,
it's self-published, it's launched to my
email list of 800 people. I thought, "Okay, I wanna make $10,000 over the lifetime of sales for the book." And it ended up making
$12,000 in the first day. And I was like, "Wait, what? Like, this is amazing." Yeah, it went on to sell $19,000 worth in the first week and
then it just kept selling. That book launched to a bigger audience. It was about 3,000
subscribers at this point. Did $26,000 in sales in the first day. Went on to sell $50,000
worth in the first month. I thought that Instagram
and Twitter and Facebook, like all these social networks, that's where the sales would come from. And instead, email is what
drove, like, more sales than all the other social
platforms combined. And I talked to a friend who lives here in Boise
who's been in marketing for a long time and I was like, "Ron, like, email is, it's driving so many sales." And he just gives me this look. He's like, "Yeah, man. Like, we've known that since 2002. Like, good job. Welcome to the party." But I just discovered
that email was amazing for connecting with your audience. And then you could also talk
to people differently, right? I could send out one email to the people who had bought and say,
"Hey, what do you think? Will you write a review?" And people who hadn't bought yet, I could email them and
say, "Here's a review." And you can't do that
on the other platforms. I loved email as a platform. I loved how personal it was as a medium and I just found that
MailChimp was really limiting. And so what I would do is use my skill as a web designer and I would
code, like, custom solutions. And then I eventually decided, like, one, I wanted my own email
solution where I was like, I want something that's built
for creators, for writers, for bloggers, you know,
for people like me. And then the other thing is I was doing these product launches and you get this huge
spike in revenue, right? You get $12,000, $25,000 in a day and then
it naturally drops off. And so I thought, one, this is amazing. And two, what if this doesn't continue? You know what would be
amazing is recurring revenue where people pay for something,
I can sell a product, and they pay for it over and over again. And my whole world, my whole
background is software. And so I thought, "Okay,
I want to get back into building software." And so I launched something
called the Web App Challenge where I said, "I'm going
to grow a software company to $5,000 a month in recurring
revenue in six months." I was only gonna do it with
$5,000 of my own money. Everything else had to
come from customers. Oh, and I'm gonna live
blog the entire thing. I think it'd be easy to say that things just took off from there. And that's not at all what happened. I think that's, you know, more true to the creator experience. It's never a smooth process. At the six month mark, we weren't at 5,000 a month in revenue. We were at like almost 2,000 a month. And it's like, on one
hand people were like, "Oh, so you failed? Are you gonna shut that down?" And I was like, "No, like,
2,000 a month is great. You know, we have this great trajectory. It'll keep growing from there." I was doing other things too. Like, I wrote a book called "Authority", which was about everything I learned about building an audience
and self-publishing. That overlapped nicely with ConvertKit, you know, as the kind of people
who would read "Authority", would want to use ConvertKit. But this is where, you know, we kind of hit a plateau with ConvertKit. The product actually wasn't very good yet, so people signed up and pre-ordered on the hype of what it would be. But it was taking time to turn into that so people would cancel. The next year, the company
just kind of stalled out and company is a strong word. It was me and some freelancers, you know? And, like, the revenue didn't grow. And not only that, I discovered the downside
of recurring revenue. Everyone talks about the upside. The downside is something called churn. And that's the cancellations that come in when people say like, "Oh, this isn't what I need anymore. My business has changed." Or like, "Your product's
just not that good." And it ended up gradually shrinking from about 2,000 a month in revenue to about 12 to 1,300 a month
in revenue over the next year. And that was pretty tough
'cause everyone says that you should stick with it,
it's just a matter of time. And I did that for a long
time and it didn't work. And I now had these three books that were selling really well. In 2013, I made $250,000
as a creator online, which is just absolutely wild. And I decided that I was
going to take some time away. Our second child was born. His name's August. We had bought a house
and we were remodeling it and we were going to move into it. And so there's a lot of things going on. So I said I made plenty of money, I'm gonna take a step back and just focus on all
the other life things. And that went really well. August was a super easy baby
for the first two months and then he got a bit
sick and then Oliver, who was two and a half at the
time, he got sick as well. And I remember thinking like, "I'm taking time away from work so I'm gonna take care
of everything, right?" And so I'm getting up
with both kids trying to handle everything that I
can and not really sleeping and it is just, there's a lot going on but I felt like I could handle it. And that was until I started to get this rash on my leg. And I go into the doctor and he's like, "Yeah, you have shingles. Is there anything that has caused, like, an elevated amount of
stress in your life recently?" And I was like, "Well, I'm
moving, remodeling a house. Oh, I have a two week old baby." And the doctor like laughs and goes like, "Yep, that'll do it." That was a pretty rough time. I felt pretty useless, actually. I couldn't work. I couldn't take care of kids
in the way that I wanted to, couldn't support Hillary
the way that I wanted to. 'Cause it's hard when it's like, look, this is just brought on by stress. All you can do is take
this medication and rest. And my brain was just completely foggy. Like, I would sit down to write, I would sit down to create
and I just couldn't. I used to really pride myself on how much I could get done, right, how fast I could work and that was gone. And the more frustrated I got
and my inability to create, the worse it got. And what I realized is when
you drive your self-worth from what you accomplish, if
your ability to accomplish and create things ever goes away, like, you've actually built it all on a really shaky foundation. So I got really depressed. Growing up, emotion was always scary. Several family members
were very explosive. And so watching that conflict, you know, emotion was always very scary. And I didn't ever go there. And I think in that process, it left me without the
tools to, like, express or to feel what I was going through. And I mean, I got to the point that I didn't wanna live anymore and I went through, like,
several different periods of really dealing with feeling suicidal and it was just really,
really challenging. Felt empty. All the things that I
thought I was good at, I couldn't do anymore. I had gotten really good at creating so that I wouldn't be at
burden on other people. And I felt like I'd lost that ability. In that moment where
we had two little kids and one being just a few months old, I felt like I was also
a burden on my wife. I had worked so hard to get to the point where that would never be the case and it was. I had a good friend who really noticed what
I was going through and would sit down and
have long conversations and try to talk through it and really recommended
that I go to counseling. It was a long journey to
come out of all of that. I think separating your self worth from really anything that
you've assigned it to. For me, it was what I created. But I think for other people, it's maybe how those
creations are perceived. How the YouTube comments or
the newsletter replies come in. I think it's really hard. There's not some moment that things switch and you're like go from I am valuable because of what I contribute to the world. To just being able to say I am valuable and end the sentence there. And, like, there's not gonna be one moment that makes that happen. It's gonna take surrounding yourself with people who reinforce that message. That's probably gonna take
having some time and space from your work so you realize that there's more to life
than your YouTube followers, your newsletter subscribers,
or whatever else. And it takes a lot of looking at why you're creating something. It's easy as a creator
to create the next thing for the numbers. And there's just so many
things of realizing I got into being a creator,
one, 'cause I love it. And two, so that I could be independent, so that I could travel, so I could give myself the remote job that other people wouldn't hire me for. And so just taking a step back and saying it's so much
more than the numbers. So now almost two years into the company, we're down quite a bit
from our peak in revenue, the product's a bit better,
but still not great. People aren't signing up. And at the same time, my other creator ventures
are going pretty well. I now have three books out at this point. They're selling well
and I'm using ConvertKit for my own list and it's like, it's a little rough around the edges but this is the tool
that creators should use. And then I was at a conference and a friend of mine named Heaton Shaw, he'd run several successful
software companies. We were walking back from a dinner just talking about various things and he just, like,
stops for a second goes, "You know, Nathan, you
should shut down ConvertKit." And I remember thinking about that, like, just being totally shocked 'cause we were actually talking about something entirely different. And he just says it like
basically outta the blue. That's kind of a rude thing to say. Like, I've poured a lot of time into this. This really matters to me. I've put my heart and soul into it. And he's like, "Yeah, you're
going to be successful at plenty of things that you do. You're almost two years into
ConvertKit at this point. It doesn't have traction, it's shrinking, you should shut it down." And then he just, like,
stops again, looks at me, and he goes, "Or you
can take it seriously. You can give it the time, money, and attention it deserves and, like, build it into a real company. But right now you've got your books and you're blogging and you
still have your iPhone apps. You've got a bunch of
these other things going on and you're split between a lot of it. Like, decide what you want." It really came down to, like,
shut it down or double down. And I'd like to say that in that moment, I was like, "Oh, double down, definitely." You know, and I jumped right into it. But I think I did what a lot of people do when they get good advice
and that's, like, ignore it for six months and then act on it. And so the revenue, like, it got worse, you know, we went further downhill, and then it finally got to this point where I think I looked at the amount of money
I was losing every month on ConvertKit 'cause it wasn't even
covering its own expenses. And I was like, "Okay, I
have to make a decision." And I had put together a little bit of a framework of how
to make this decision and I'd come up with two questions. And the first was do you still want this as much today as the day that you started? 'Cause if not, that's fine. Like, there's all kinds of
things that we start as creators where it's like, "Oh,
this is gonna be the best. I'm gonna write this book. I'm gonna launch this project,
podcast, YouTube channel, whatever it is." And then a month later or a year later, you're like, "I don't
actually want this anymore." And then you can just let that go. That's fine. So when I thought about that, for me, it was like,
"Yeah, I still want this. Like, I want this next challenge. I wanna be the CEO of a software company. I want the recurring revenue. Like, this is the next thing for me." It's like, okay, well,
it's not working still. Like, it's great that you
want it, but it's not working. So the next question I asked is, like, have you given this every
possible chance to succeed? Is this truly your best effort? Because if yes, like, that's fine too. All kinds of things that
you really, really want and you give your absolute
best effort to don't work. That's part of being a creator. But if you have done that
and you know in good faith, like, that is everything you had, then, like, let it go. You can know that that
was your best effort. And for me, there was this disconnect. Like, I thought about it and I was like, "Well, I've
been working on it part-time. I haven't put in that much money. If I quit today, I'm always gonna wonder, like, could I have made that work?" And so I was thinking like, "Okay, I think I need to focus on this and I think it needs real money." But if you're gonna go raise money, having a company that's been shrinking for the last year is not a good position to raise money from. Like, I didn't even try because that would be a disaster. And so I remember talking to Hillary and just feeling like I
should double down on this, but we were in a position
where we had bought a house, we had two kids now, we
just remodeled our house. Like, it was a big deal. You know what I'm saying? Here's this thing that makes money for us with the books and the blog. I'm going to ignore that and I want to take most of our savings and, like, retirement fund and put it into this company that has been shrinking for years. And she was like, "You should do it." Like, I was just shocked. I thought I'd have to convince her and that she's like, "No,
absolutely, you should do it." I think it was a year later or more, I asked her what made it so
easy for you to say like, yes, absolutely, we should do this. And she shared that at the
time, I didn't do anything. I was so depressed. She was just hoping that, like, she saw the little bit of energy that I had and the excitement that I had that maybe I could make this work. And she hoped that that would be the spark that would get me out of this,
like, out of this depression. And it was. Yeah. That was the inflection
point for ConvertKit. That was early 2015, 2
years into the company. There were a lot of people early on who felt like it would be much better to stay focused on books. Like, why stop something
that's going so well? I think anytime, as a creator, that you pursue something new, there's gonna be people who
are saying you shouldn't do it. This other thing is more interesting. And it's especially hard
when you can't explain why you're doing the new thing. But, like, everything in my
gut is saying go after this. Like, put all the resources, like, make this happen. Go as fast as you can. And yes, it's making $2,000 a month and the books are making $50,000 a month. But I think when you have
that gut feeling of like, no, this can be something,
then you have to follow it. There's always gonna be
people in the YouTube comments or here replying your
newsletter who are like, "Oh, this isn't a good idea. You shouldn't do it." But it's harder when it's people that you really care about and respect and it's just a tough balance. Sometimes you should listen to them, but then other times, if they're saying things
that you don't agree with and you've thought about it, you've taken their
perspective into account, then you just have to go with it anyway. And to say that I'm glad that I went with it would be
the understatement of the year. So I took $50,000 out of
our retirement savings and I put it into the company. I hired someone to work on it full-time so I wasn't gonna deal
with contractors anymore. And instead of being,
like, email marketing for anyone, it pivoted to email marketing for professional bloggers and started doing direct sales and the business exploded from there. By the end of the year, we closed out at 98,000
a month in revenue. And of course, like most creators, instead of, like,
celebrating the wild change from 2,000 to 98,000 a month, I was like, "Ah, so close to 100." Like, we were so close. But it was an insane year and it really came down to
doing all of those things that don't scale, like
putting in all of that work to build the word of mouth. And then once that kicked in, you know, people were
talking about ConvertKit. It was, you know, powered by ConvertKit and was showing up in
emails and landing pages. Then it just started growing, you know, faster and faster than
we could even handle. I think I thought pretty small. And then I realized, "Oh, once we build
something that people want, like, we could build this
to a million dollars a year, 10 million a year now, 30 million and on our way to 100 million a year." And I think that's true for pretty much all creator businesses is, like, if you change the group that you're spending your time around, you know, and that shapes your mindset, then you can turn something into a much, much bigger business. I think the first time getting the whole team together was
a dream come true moment. We were up in the
mountains outside of Boise, there were 21 people on the team, and I remember this
moment of sitting around in the living room of this
like big 10-bedroom house and just really enjoying
seeing everyone being together for the first time. And then I had this moment of like, it feels like everyone's
waiting for something. Like, it's time for, you
know, someone to lead this. And then realizing like, "Oh, that's me." And as I think I matured my own journey of switching from okay, how do
I earn a living as a creator to really establishing the company mission to be we exist to help
creators earn a living. The shift for me was realizing it's not me taking center stage. It's me sharing this mission
and being the spotlight or the voice for this mission
that we're all doing together. And I think that just makes
such a huge difference knowing that we have a reason to all be together that's much bigger than
like, "I'm the CEO, pay attention to me. This is my company." Or something like that. It's like, there's a much bigger thing that we're all doing together and all of those company presentations that we do revolve around the stories that we're telling the
creators that we serve. When you talk to someone about what it means to be a
creator, if they're a creator, often they'll talk about, they're like, "Oh, I'm not a creator." Like that's some lofty
thing to live up to. Or they'll say, "I'm not a creator. I'm a podcaster or a
author or something else." Like, they'll list a
specific type of creator. I think we're really just
looking for an umbrella term for someone who not just
makes something, right, 'cause lots of people make things. You might have your hobby, right, where you're knitting or woodworking or journaling or whatever else. And I think it's important
to define creator as for other people. Someone who, you know, inspires and teaches other people, right? It's not just for your own gratification. It's to make the world a better place.
