ConvertKit’s Interview with Nathan Berry and Nathan Latka – Audio Transcript
Nathan Latka (00 : 01)
Hey guys, my guest today is Nathan Barry. You’ve definitely heard of ConvertKit and hopefully you’ve seen so many other things he’s working on, related to tiny houses, investing in friends companies, but most importantly just creating and building and supporting the creator ecosystem as he really brings his customers before front of everything he’s doing, whether it’s sharing their stories on a podcast, writing about him on the blog or many other ways they do this at kinberg. We’re gonna touch on all this today. Nathan Barry, Thanks for coming on the show.
Nathan Barry (00 : 29)
Yeah. Thanks for having me.
Nathan Latka (00 : 30)
Okay, so the first thing I want to touch on is actually is not software related. You know, we’re in a very weird time right now where everyone is sort of lockdown. We also know that your community is extremely important. You’ve personally built community both online and in person. And I want to go back to sort of pre covid days and just ask for your thesis on why you decided to get involved with your friend Brent in buying an old ranch and how that relates to community.
Nathan Barry (00 : 56)
Yeah. Oh man. Well, if I look back on my journey as an entrepreneur, so many of the inflection points came from people that I met in person, right? Um say a conference like microphone where there was one years ago that uh, Amy who and Alex Hillman put on called bacon biz, which is just a fantastic conference. It was just for the people who are focused on making money, right? And there’s all of these events that you hang out with hangout at and meet someone and they’re the one who drops an idea that changes something for you. Or for example, there was this conference years ago called the world domination summit chris gill abo hosted and I went in 2012 and I knew no one super shy, like okay, I guess I let’s do this. I’m supposed to meet people, you know, that kind of thing. And I just decided to walk up and talk to two guys who were staying there talking um, turns out to be James clear who is the author of Atomic habits now, but at the time he had a tiny little newsletter, had
Nathan Latka (01 : 57)
Nathan Barry (01 : 57)
Yeah, well before anything. And then Caleb logic, who’s this incredible video producer? Um, he’s done everything for Pat Flynn. He invented the switch pod with Pat Flynn and like all of this, Right? And that’s the kind of thing that happens when you show up an event that’s a curated group of people and you have these conversations in person. And so I’ve always just been a fan of um, great in personal experiences and, and we’ve we’ve started our own conference four years ago, ran that every year except for this year. And so it’s just something that I’ve loved and so when, um, actually Ryan Holliday was the one who texted me and was like, hey, we’re buying a ghost town and like it’s closing soon and um, we need more money
Nathan Latka (02 : 49)
Brian, you gotta go wait a second. Is this a headline? He’s pitching because you know, his genius, smart, just like, are you actually, is there actually a ghost town or?
Nathan Barry (02 : 56)
Yes, exactly. Um, and I had known Bright Underwood from, because he has an agency with Ryan and uh, they run the website daily stuck together, which is a converted customer. And so I’ve known him somewhat, you know, um, but Ryan was the one that kind of pulled me in and it was just this thing where, Because it was a unique property and this is Sierra Gorda, which is a 300 acre ghost town in the Sierra Nevada Mountains. Um, so when you stand on the peak behind it, if you look to one side, you see Mount Whitney. So the highest point in the Continental U. S. If you turn around, look behind you, you see Death Valley, which is the lowest point. Um, it’s just this crazy place. And so then I thought, okay, one uh, Brent and Ryan and the other partner john just have this great idea for what they’re going to do with it. And I was like, can you imagine the mastermind groups and the many conferences and the writers retreats and whatever else that you have, like the stories and memories that you can make out a place like this. And so yeah, I had, I had to get involved.
Nathan Latka (04 : 05)
And so what has happened, obviously, Covid changes things and brands putting out great content on Youtube. It looks like he’s been living there for a while. Have you guys been able to have sort of a mastermind? Were usually living in old mining cabins and waking up in the morning and seeing Mount Whitney and Death Valley. And
Nathan Barry (04 : 21)
Yeah, some of that has happened. The property is taking a lot longer I think. Then we originally thought to get it up and running and and get it to the point where groups can stay there. So I’ve actually only been there, I’ve only been there twice and just taking my family down. So we haven’t yet had a big gathering because there were things like had to get running water, had to get uh, you know, get it livable again. And Um, and then there was some big setbacks in there. Like this summer there was a fire caused by some really old electrical that burned down the hotel there, that it was on its 149th anniversary of opening, that the hotel burned down. So it’s kind of like anything in entrepreneurship where you have these great grand dreams and then its way, it turns out it’s way harder than you thought. And then just when it’s really hard, then there’s this crazy setback of like the coolest building in the whole town getting burned down or I don’t, the equivalent from like you’re in my businesses would be like when you lose that customer that you’ve fought so hard to get like that was that stretch thing. Um
Nathan Latka (05 : 28)
Can you, can you make an analogy there, if you look at convert kits history and we’ll dive more into convert kit here, but is there, is there an equivalent to the old 149 year old hotel burning down?
Nathan Barry (05 : 39)
I think that. So our very first team retreat. Um Let me set the stage so january 2016. The previous 12 months we’ve grown from 2000 and mrr to 100,000. Mrr. So just crazy growth. We had no money in the bank. We were thinking should be raised money. I think we were spending 80 grand a month and we had like 15 grand of cash in the bank. But we’re sorry
Nathan Latka (06 : 04)
Net Net Burnt. Net Burn was 80 grand a month. Or gross burn.
Nathan Barry (06 : 07)
Uh So gross where you know, we’re still profitable and like the dollar amounts were going up like the bank balance is getting bigger. Um But at the same time uh you know like your day’s worth of expenses is going down right? Because 15 grand in the bank when you have five grand of mrr and five grand of expenses, that’s fine. But when you have 100 like, it’s not cool anymore. Yeah.
Nathan Latka (06 : 35)
And we have underground, underground mrr 80 grand expenses. 15 grand in the bank. Team retreat.
Nathan Barry (06 : 41)
Yeah, so that’s where we were. We had basically, we wanted to get the team together because we had, I don’t know, 13, 14 people on the team at the time, and we thought, okay, but we just can’t afford it. And so we cut expenses double down, or we didn’t cut expenses. We basically locked expenses and then grew our way out of it. And we grew away from barely break even 25 months later, we had 60% 50 profit margins, three months of expenses in the bank. And we did a team retreat to celebrate. And so that was like the big high in entrepreneurship. And the whole team flies into Boise. We have like, everyone is showing up for this team of street and we get a denial of service attack, where someone goes like, very deliberate, very malicious goes to take down our servers and You know, it’s like, I distinctly remember picking up Brad one of our lead engineers at the airport and I show up and he’s like next to baggage claim on his laptop, trying to keep the servers up, and it’s that sort of thing where you go from these crazy high and it’s like, oh man, I can’t believe we pulled that off to the equivalent of your hotel burning down, or like this, like, I don’t know how we’re going to recover from this, and you always do, you know, that’s just part of entrepreneurship, but that’s the journey that we all signed up for
Nathan Latka (07 : 59)
Nathan, I want people to stick around, and so I want you to plant a big open loop here and then we’re gonna dive more into the sort of emotional side of the story going back to when you were doing woodwork at 13 years old door knocking today, where it’s convert kit, what’s top line revenue?
Nathan Barry (08 : 14)
Yes, we’re 25 million air are right now. And how much profit? Yeah, we’ve been spending a little more aggressively this this year, so we’re doing about five profit. and then, uh, but at the beginning of the year, we’re close to 20 23%. And so next year we’ll return to the 20 more.
Nathan Latka (08 : 35)
20 Ebitda margin.
Nathan Barry (08 : 36)
Nathan Latka (08 : 38)
So you want to stick around for that. Something else, Nathan is doing what he puts on his website is he specifically says $1.8 million paid out to the team. So there’s some profit sharing happening here. A lot of you guys who are bootstrap founders are wondering, how the heck do I set up profit sharing without spending $500,000 on legal? So we’ll get back to that in a second. But Nathan, Take us back to 2013, sorry, when you were 13, Nathan, I think what? Maybe 2005 or earlier and three,
Nathan Barry (09 : 02)
Nathan Latka (09 : 04)
Okay, Wow, 19. Okay, so we’re about the same. You’re what? 30 right now.
Nathan Barry (09 : 08)
Nathan Latka (09 : 09)
Woodworking. So first off, what do you remember the moment? Did your, was there something you really wanted and you needed to make money and your parents said you got to figure out to make money and then you said I’m going to go. So woodworking or what was the genesis of that first thing you created?
Nathan Barry (09 : 23)
Yeah. Well, for me, like I grew up in a household where money was really scarce. My dad ran a christian college ministry and so it lived off of donations and support from um, you know, churches or other groups. And so money was just not a thing that there was much of it. And so my my parents did a really good job of instilling that like uh if you want money go earn it and the way that I did it was my dad was really into woodworking, he built the house that we grew up in. And um so we had this like little shop of, it was a lot of like kind of hand me down tools, but it worked great and so I would do these woodworking projects and then go door to door to sell them to earn money. And and uh I remember I had made a bunch of these like wood carvings and stuff and we were headed in, it was actually black friday. Um so we’re gonna head into into town because I grew up in the mountains outside of town could do some black friday shopping
Nathan Latka (10 : 21)
Hey Nathan. Which town? I know obviously but I think the
Nathan Barry (10 : 24)
Audience Boise Idaho. Yeah. Um and so uh we were going to that, he was one of the things we’re gonna head into town at noon or something like and so at 10 a.m. I was like great I’m gonna go wander around this neighborhood, go door to door and then like Pick me up here, you know, a mile from town and then we’ll just see how much money I’ve made by that. It was one of those things where I think I made $120, you know, selling these things door to door an hour later when my parents picked me up as we drove into town. And that was just sort of the mindset that we always had of like, great if you want something, I’m not gonna give it to you, go, go pursue it, go figure out how to get it done.
Nathan Latka (11 : 09)
What was your reaction? What was their reaction when you got in the car and empty your pockets with a bunch of like crumpled up dollar bills?
Nathan Barry (11 : 17)
You know what’s funny is I think they were still used to us just as kids figuring out how to make money that they were just like cool, you know, and there wasn’t like, it wasn’t even this big celebration moment was just like, well, yeah, obviously. Who’s
Nathan Latka (11 : 31)
Us Nathan? How many, how many siblings?
Nathan Barry (11 : 33)
I have? five siblings. So in the 4th of six kids?
Nathan Latka (11 : 38)
Uh, okay. Okay. Well fourth of six. That’s incredible. Okay. And are they, so did they all end up just building sort of communities and creators world or did one of them end up in like Wall Street Finance or something?
Nathan Barry (11 : 50)
I do have a brother who works in corporate finance and Well, by the Jets, I mean everyone’s all over the map. I’ve got a sister that uh lives in Seattle and works on copyrighting and that kind of thing for, you know, a bunch of big clients like Ebay and American Airlines started Alaska Airlines. Um Yeah, brother who’s a physician’s assistant, got a couple of siblings who are programmers. You know, it’s just it’s all over the map and I think that’s you get into a whole nature versus nurture uh sort of debate. But I think, you know, humans are just very different
Nathan Latka (12 : 24)
Nathan. Has your little guy had his woodworking, door to door knocking? First sales moment?
Nathan Barry (12 : 30)
Um, I don’t know. Let me think about this. Well, they always, we don’t do an allowance or anything, so they come to us with ways to earn money. Um, I think this year probably would have been the year of the lemonade stand or something like that just based on my kids are 96 and then 11 months and you know, it’s just, it’s not a with code, but it’s not a good year for door to door sales.
Nathan Latka (12 : 55)
Not. Yeah, definitely not a good thing opposite. We want to be
Nathan Barry (12 : 58)
Nathan Latka (12 : 59)
Okay. So well $120, woodworking, four of six siblings, 2005. You’re 13 years old. You eventually obviously end up, I believe going going to college. Let’s fast forward here a bit. What did you do in college? Would you study?
Nathan Barry (13 : 13)
Yeah, I studied graphic design and then marketing. So I wanted to I wanted to do graphic design, you know, Photoshop interface design and all that. Um And I I went to college super early because all my friends were older than me. Um I was homeschooled and I wanted to keep up with them and so basically asked my parents um hey, is high school four years or is high school a set amount of work? And to their credit, they said like it’s a set amount of work. It was a great, can I have that to do list for him because basically all my friends are gonna graduate two years before I was and go off to college and I didn’t want to be left behind. And so when my parents listed all out and I had older siblings who had finished high school already and so they had already figured out like this will be all the home schooling curriculum. Um Then I just sat down and knocked it out. And I remember thinking like I’m bored when we go in these family road trips from Boise to Seattle every summer, I’m also bored when I do algebra, so why don’t I combine these things and I’m like an eight hour drive, I do a month’s worth of algebra lessons or something. Um and so then I graduated college or graduate high school when I was 15 and started going to college
Nathan Latka (14 : 25)
And graduated college. How old
Nathan Barry (14 : 27)
I dropped out of college at 17.
Nathan Latka (14 : 29)
Okay. Okay. So why the dropout where you’re making just so much money selling your own stuff at that point? Or why drop out?
Nathan Barry (14 : 36)
Yeah, So I was going to college to learn how to make money. This is all quest of, I want to figure out how I can make money. Um and you know, you earn a living and eventually become financially independent and I had started a web design business by then. It was doing well basically. I got my 1st $10,000 contract um and I called my mom and said, hey, I think I’m ready to drop out of college. And I expected to have to like convince her that was a good idea. And she, you know, she followed my progress and I talked to her about the web design business. I’ve been running in the freelancing and stuff like that and she just said like, yeah, I expected that we’d have this conversation soon. Yeah. Did
Nathan Latka (15 : 19)
She have money on the line? What were your parents helping cover college expenses or anything like that? Were you paying yourself?
Nathan Barry (15 : 25)
I was paying for it myself. Um I got a lot of grants because like the low income, you know, FAFSA grants and stuff like that, financial aid and then the rest, you know, so I dropped out with like $5000 of student loans rather than a crazy amount. So yeah, that was the case we’re having, coming from a low income family really helped.
Nathan Latka (15 : 47)
So you, and we’re gonna want to put all this sort of on a mental map which you’ve used and I can’t credit the person cause I forget, maybe you can the ladders of wealth who created that again?
Nathan Barry (15 : 58)
That’s, that’s just an idea that I’ve, that
Nathan Latka (16 : 01)
Was you okay? I wasn’t sure if you pulled out of a book or if that was you. Okay, got it. So Nathan has particular sort of ladders of wealth that, that explains how he thinks about wealth creation. And so one of things you talk about a sort of moving from trading your time to eventually, you know, bundling your hours into project sort of things, would you call this 10-K sale, your, your first sort of bundled agency product where you weren’t selling hours?
Nathan Barry (16 : 24)
Yeah, and I think that when I was still, that was probably this transition right between selling hours and like selling an outcome. Um, and, and so yeah, that was an an early example of a product, but but still largely, you know, hourly project based work, but it was definitely a continuum. It was not the hourly web design work that I’ve been doing before, it was like, okay, now I’m getting paid for an outcome and they’re starting to be this disconnect between the effort that I put in and the money that I make, which is what we’re looking for, an entrepreneurship, right? As these things are tightly coupled, there’s no leverage, but the more those can be disconnected, then there’s at least an opportunity for leverage. It can go terribly wrong and you can have a project that like, like your 100 hours in to deliver this outcome that you’re not getting paid enough for when the leverage goes poorly. But you know, we try to create those situations where the leverage goes walk goes well where we can deliver, you know, a ton of value with less inputs and get paid for it,
Nathan Latka (17 : 26)
Nathan, one of your recent tweets was something along the lines of is there anything that you’ve actually committed to and done consistently for a long period of time and not had success? And there were a couple replies, but I mean if I didn’t know you personally and I just looked at charts and graphs and numbers, I would someone up by saying consistency, but both maybe people would say sometimes bad, consistent and in good consistency, and so, like, bad consistency, which, you know, it’s not actually bad, but when you look between 2013 and 2015, you are so consistent. I convert kit, mrr, never really got above five k per month. It was, you know, sort of 1 to 5 K. And then in 2015 something happens. And literally, the curve of your revenue growth shifted, and now it’s been like literally consistent for five years in terms of just growth, there’s there’s very little blips happening. Is this intentional?
Nathan Barry (18 : 15)
Well, I think it’s that all of these things take a lot more time, and so we think about if I show up in the right way, then I’ll achieve the success or something, and that’s true. It just it often takes a long time to figure out how to show up and what things to work on and so I can convert it. Things that made a difference. We’re moving from um like content driven, uh you know, for trying to grow a sas business content by the way, is a really hard way to grow a business, like go from 0 to 1 and like basically, like no attraction, too simple traction. Um and that’s what I was trying to do, but if you don’t have the community already, it’s very hard to um and it was really shifting from that to a direct sales model of kind of this this paul graham, like do things that don’t scale of do anything to get the customer do custom development or migrate them all yourself, all that and do these things to inch forward the progress. Um and that’s what turned into something that, you know, that was actually working. And then, you know, Novell robert Khan talks a lot about looking for things in life that compound and so much in entrepreneurship compounds, just like it does in, you know, investing and everything else, where those returns come over time and they come much later. And if you remember learning about compound interest in middle school, you’re like, wait, this isn’t actually any good, you’re saying that I’m gonna put in all of this and then five years later, like, this is what I get from it, and it’s just, it’s not impressive at all, and then you have to fast forward another 10 years and 20 years and you’re like, this is incredible, this is mind blowing, how does it turn into that? And it’s like, well, compounding takes time. And I think an entrepreneurship were like, that kid in middle school were like five years and that’s all I get like No point and we fail to look further down the road and like, oh but in 10 years it will be this, that’s why I think everyone does with their companies where so your company like mel jump Um I don’t have the exact numbers I’m assuming at this point based on trends for previous numbers there somewhere around 750 million annual revenue uh maybe as much as a billion but probably not quite there yet. Um They’ve been at it for 19 years. And so when I look at the curve that I’m on with converted and if the curve that male tempted, if we were to overlay those two convert, it is far ahead. If we put the start date of the two of them convert, it is far ahead on that curve. Um Then Milton was eight years into their business and I think this is the point where people were like wow you’ve made, it was converted. You should sell, you should have sold a while ago like the moment that 1st $100 million acquisition offer came up you should have sold and move on to the next thing
Nathan Latka (21 : 03)
Nathan Barry (21 : 04)
Uh So we haven’t had like a crisp like here’s the offer on the table but like the private equity people show up nonstop you know. Um and I just always like saying no thanks before he gets it just just just
Nathan Latka (21 : 19)
Charged for the call, say I’ll get on a call with you but it’s $5,000 for 20 minutes. You can
Nathan Barry (21 : 24)
Make a good idea. Yeah and uh anyway, so I guess what I’m saying is I feel like I’m just getting started and if I want to build the scale of company the name to or that that I want to do, then I need to give compounding time to really kick in. And so we’re eight years in in like selling and being done now is just way too early. And so it’s like if I want to build a male chimp level company or a stripe level company or something like that, that is great show up for another decade and then we can start to talk about the level of commitment that you have and where the results come from.
Nathan Latka (22 : 00)
I mean, Nathan is it really sort of a start and a stop. I mean everything I’m seeing you do. I mean this is, this is just you, it’s built a creator community, it’s build team members, it’s allow your team members to build wealth with profit sharing. You’re obviously also making money, You’re in reinvesting in friends, businesses and things you love. And uh, and you’re talking about now, not only multiplying your time or an agency work or now software, but also now capital, leverage after that. I mean, what would you do if you sold convert kit?
Nathan Barry (22 : 31)
I don’t even know, maybe uh, build a tiny house community, you’re
Nathan Latka (22 : 38)
Nathan Barry (22 : 38)
That and that’s a thing of like, it’s not this all or nothing. Um, I think that’s a really good question to ask when those acquisition offers come in or something. I’m like, okay, but what would I do? And I go right back to building software because I love it. And one thing that I love now is the leverage that we have. So, for example, this year we launched converted commerce, which is our digital product sales platform. And if I would have, like that’s something that’s just different enough from converted that, it could be its own start up entirely. And so if I were to start over and do that, like that initial attraction is really hard to get a lot of work, obviously having done a successful company, the next one is easier, the relationships that you already have the brand reputation and everything, but like now for converting it’s like, oh we have 250,000 users and so let’s just tell them to use this new thing. And so when you come out with something like wow, this is getting used by thousands and thousands of people, which is like the creator’s dream and so it’s one of the things that if you sell it, if you move on then you lose that or some amount of that leverage. And so I’m just like no, I like the leverage too much, I’m gonna keep doing this, it’s
Nathan Latka (23 : 49)
Great and it’s so hard to quantify. Like this leverage idea is so hard to quantify. So it’s I want I want to dig here a little bit um let me just ask a bit, you know obviously commerce in any call it sort of a SAs plus plays a SAS business plus something else, professional services, percent of G. M. V. Model a marketplace. Maybe when you look at the commerce business, one of the goals you talk about is man, I love to that point to the point we pay a billion dollars help creators make a billion dollars. You launched your last year in 2019. How much went through your system in 2020
Nathan Barry (24 : 21)
We have two different numbers that we track. The first one is like the total amount earned by creators using converted as email products. Um and in 20 The beginning of 2019 or 2018, I’m trying remember exactly when we launched new api so that when people are selling through converted and using Shopify or teachable or striper and these others, it reports like it includes the reporting of um where the revenue came from and how much you’re earning and aggregate sit across all these different platforms, so you have one creator dashboard um and that’s been really cool and actually january of this year, we passed a billion dollars earned by creators on converted or through like other place for the aggregation through the aggregation. And so now um with converted commerce, it’s basically like we checked out this big goal which is on our mission page and then we said like done next now, it has to be a billion like process through our payment systems um and that we launched like in private beta in mid july. Um And one thing that’s been interesting is it is much harder to get traction than I expected so we’re almost half a million in G. M. V. Um And it’s fascinating how it’s
Nathan Latka (25 : 41)
Total GMD process through july.
Nathan Barry (25 : 43)
Yeah and so it’s it’s a lot lower. Like just for example in in a conversation we were having over email, you’re like, hey have you hit that billion dollars yet? And I was like, not only have I not hit it, but this is hard and it’s again these compound returns that are going to come into play if you’ve got to get people to switch over from what they’re doing, you’ve got to get all the beginners who are thinking about selling their first product right? They made their 1st $50 the 1st $100 and it’s going to be a few years before they’re making 10,000 100,000. And so like it’s been a really healthy reminder for me of, oh yeah, I’m starting compounding on a new thing and it’s going to take time because I’m that entrepreneur who’s like, okay, let’s go, let’s, you know, let’s be at a million by this day and then a million a month by that day and then, you know, um, and just realizing like to get all this momentum to shift, it takes a lot of time. And so I’m having to learn both to put in the concerted effort and to be patient for the results.
Nathan Latka (26 : 43)
And how do you think about launching new product like that? Do you really go deep on a persona and maybe actually use that persona you call Pat Flynn, say Pat, I know you do more than a million a year in revenue. We love to process all your commerce. What’s that have to look like for you to switch over Or do you try and build something more broad and appeal to 100 beta users?
Nathan Barry (27 : 00)
I think you try to do both because um, you can fall into traps in both ways. Uh, like we use object we use okay are subjective and key results to manage and track our business and what you usually end up doing is having a main objective that you’re going after. And in our case, like let’s say G M. V. Right? We’re trying to to, we want the most dollars sold. But if you optimize only for that metric, then you might do things that is for short term gain, but not the long term. Like we could say like, okay, we’re trying to get to 10 million in in G M V And X amount of time. Then if I just go out and get a single client that sells $1 million dollars a month, like done did it like, you know, we’re set but that isn’t success for the platform. And so then um you can go the other extreme and say like I’m gonna help X number of creators earn their first dollar and that’s all well and good, but everybody follows the big names so you don’t have any of the big names, like it’s way harder to get those. And so what I look for is the key metric, which is GMV and then the counterbalancing metric. And so in this case we’re looking to drive the most GMV, that’s the main thing. Small creators, big creators all contribute to that. But obviously the big creators drive far more. And then I have a counterbalancing metric of I want X number of creators to have earned at least a dollar on the platform. So that says I’m going after this big number. But I also have to include all the small creators because two years from now, three years from now they are the big creators. So that way I’m not trading short term success for like long term, uh, long term results because five years from now it’s, if I get tens of thousands of the small creators, then I’m for sure going to have, you know, like they will be the big creators five years from now
Nathan Latka (28 : 54)
Reminds me you think politics and I know you, you dabbled on the hill for a bit. It’s sort of like when the folks report their fundraising numbers and its average check size, you want millions of small donors versus one massive donor if you’re going to build a movement.
Nathan Barry (29 : 08)
Yeah, for sure.
Nathan Latka (29 : 09)
Okay, so that’s the status of convert kit commerce. Um, let me give a little bit of ammo here to our sas folks that are listening and going, I want tactics. Nathan is amazing. From what I can tell. You’ve used really three acquisition channels really effectively. Um, one sort of the power by convert kit, in fact, in one of your twitter tweets, you said, hey, why did you upgrade? And they were focusing, We wanted to pay to remove the power by convert kit. So you get obviously some free clicks and a lot of free traffic from that. I think you also have a great affiliate program. I noticed the flight linking your, this footer and you also have big names that are known for promoting products they really believe in. Um, and then lastly your SEO content seems to be super strong. You put some of the key anchor articles in your footer as well, so I’d love to spend five minutes just touching on those. Could we maybe start with the powered by convert, can you quantify the success you’ve had using that as a growth channel?
Nathan Barry (30 : 01)
Yeah, so it’s still relatively early just for some more context, we’ve always been a paid product um you know, like free trial, but you got to pay to use it until january this year, when we love premium. Um and so you can see like prior to this year, Um so last year maybe we were driving 2-3,000 visitors a week Um through powered by links. And then after launching premiums feeling that up, we’re now driving uh 14 15,000 visitors a week from powered by links. So you’re just seeing, it’s actually a couple step functions in there as we made our free plan more valuable. Um got the adoption of stuff like that now powered by traffic converts a lot lower than other traffic. I don’t have the exact numbers in front of me, but You know, if a visitor to conversion visited a free account conversion rate is seven or 8%. Like in, You know, other channels than powered by traffic might convert it 1-2%. So it’s much more of this broad awareness play than like a direct um conversion, but just like not many traffic channels just keep climbing like that, so it’s really fun to see. Um the next one search is really like just that anchor that we’ve, I don’t know, gradually invested in over time and now um it pays off in a big way um
Nathan Latka (31 : 28)
Actually in a massive way. I mean if you look at a tres, I mean you’re now generally rank for almost 70,000 organic keywords. You’re getting 100 20,000 clicks organically per month. I think that’s unique. 10.2 million back links. There’s obviously a credit to probably a bunch of hosted page products that you guys
Nathan Barry (31 : 43)
Have, but I mean you’re killing it in S. C. O. Yeah, so what drives about 40 of all of our new accounts? Uh wow, is from search one interesting if people are looking for like a quick tip for link building that’s been passing, we didn’t do it on purpose but it’s worked out really well is we’ve been doing these creative stories where we profile creators tell their story and we’ve been paying for photographers to come out, you know, and like a local photographer to come do all the photos for the story and give it to the creator and say, hey, use these on your website uses because you’ve ever built a website for yourself. You’re like realizing, oh and here’s where I’ll put the perfect header and he was like, I don’t have that, I haven’t hired a photographer going to do that and some people love it when we give those away. But then we also did it say, hey, we have this unspool ash ah collection of creator photos, if you’d like, will release those, you know, if you sign off on it and you’re up for it will release those photos on, on splash as part of our convert creator collection and that has like there’s millions and millions of downloads of those photos now and a bunch of people will credit can work it. But what’s interesting is on all the popular sites that use them and they get used a lot. We just send a quick little outreach email and say, hey, I still use this photo. I’d love it if you provided a back link back to, you know, if you link back to convert it as the creator of this photo. If not, no worries. It’s licensed under creative commons. You know, you don’t have to, but if you want to, we love it and that has driven so many back links because you get these photos that millions of people are using and they’re just like, oh yeah, sure. I’d love to give credit, especially when you’re up front of like, you don’t need to at all. Like we’re not coming and saying you have to do this. Like,
Nathan Latka (33 : 34)
Fascinating. How much did you spend on, on local photographers featuring your customers in 2020? You have a general idea.
Nathan Barry (33 : 41)
That’s a good question. We um, I don’t have that, I’d say 500 to $1000 per shoot somewhere in there and then maybe 11 shoot per week. Okay, so
Nathan Latka (33 : 53)
It’s this this tactic could cost $50 $200,000 per year.
Nathan Barry (33 : 57)
Yeah, exactly. And
Nathan Latka (34 : 00)
You get direct return in the form of these back links, but you also get just amazing community return. This helps this helps your customers in so many ways, and it’s free.
Nathan Barry (34 : 08)
Yes. So this is kind of the way that I think about marketing is if there is an activity that we’re going to do, like, we’re going to release these creative stories because we want to be a brand known for um, great storytelling. And I think all the most iconic brands are storytellers. And so like, great, okay, let’s start telling stories. And then we need to, we need a process for that. So there’s like, we need to do photos for the stories, we need to do those things and you end up with this sequence of events that you do and you do this over and over again. And I think that’s the way that most people approach marketing or whatever task of like I have to do a B and C and I will do that a bunch of times and now I guess jim Collins in good to great talks about flywheels and taking all of these sequences of events and turning them into a flywheel where each step logically feeds into the next and around and around you go. And so we think about it in marketing of these different like these stories, we want to produce a great story and it needs writing and photography and around there and since we’re producing the photography, we should promote that and share it as many places as possible. So that’s where these um splashed collections come in because then that will get more attention for the stories. And then our, our search for like S. E. O. Flywheels should fit into that of like, oh, since this asset is being created and millions of people are downloading it. Let’s tie that into our link outreach and basically see how can I make these different systems that when they fit together, every, every rotation of the fire will make the next rotation easier. Um, and I look for that everywhere of Okay, great. If we’re doing this one activity here, how can it serve the rest of the business or how can it have these other byproducts that um are really valuable
Nathan Latka (35 : 55)
Nathan? Is there somebody on your team that is that you’ve hired that is solely responsible for watching systems that other people are running, documenting the system and then creating a flywheel or do you triangle into the DNA where everyone, if they do some networks, they have to document it and share it so you can invest in systematize ng.
Nathan Barry (36 : 12)
Yeah, I would say there’s not one person, the person who does it the most is Barrett brooks whose r colo uh and he’s been with the team for quite a while. He started working in marketing and then grew to leading marketing and then it’s down the oh, oh, um, so he’s probably the best at it, but it’s definitely something that we’re trying to teach everyone to do. And like Isa Abney who runs, she’s, are, her title is Storyteller. Um she’s the person who we like taught this to, at a high level in the company and she was just like, okay, I’m gonna take that concept and run with it and take it so much further than you thought. And so she is the one that’s implemented all of that. And to give an idea where it’s at now. Um, I’m working on a book called create every day. And so in writing those chapters, I’ll get stuck in about, okay, I need, what do I need? I need a story of a creator who created really consistently every day, you know? And so lisa, what do you have there? And she goes to her database of all the creators that she’s interviewed and says, here’s four of them. Am I? Oh, perfect. I dive into the stories is already Great photography. There’s already these quotes and everything. And then I’ll come back a while later. Okay, I need someone who really persisted for a long time and didn’t get the success early. You know, they got it three years, four years in and she’s like, goes to her database and she’s like, oh, here’s these four people, Right? And so it obviously we’re doing the work to tell the stories to build a brand that we want, but we’re trying to do it in a way that serves everybody else. So then when our content team is writing something about how to use commerce or a new how to do email marketing and growing a list, like they’re pulling these snippets and examples from the rest of the, of the content machine, basically,
Nathan Latka (38 : 00)
This is this is this is fascinating to hear how you, how you build all these on top of each other. You know, you’ve now you’ve now stacked a bunch of these things. And one of the things that I’m curious to ask you is you you clearly focus on community, I mean, you must at some point see yourself almost like a talent agency for creators where you’re making them their own celebrity with the photos, with the distribution and their then that enables them to get attention and build their own brands. Do you ever think about that? Are we going to see a convert kit talent agency for creators?
Nathan Barry (38 : 32)
I don’t think we’re going to see that to quite the same extent of life. I was trying to get bookings and things like that. You’re definitely gonna see it down the road from a marketplace perspective of here are featured products to buy and here’s the best, the best e books, the best Photography Resources, all of those sort of things were driving the
Nathan Latka (38 : 58)
When does that launch? When’s the converted marketplace launch?
Nathan Barry (39 : 01)
It’s probably a couple years off just for a little bit of uhh, I don’t know, I don’t know if it’s inside baseball or what, but marketplaces are very a trendy exciting thing to do. And one thing we almost went from what we have today right into like, and then let’s do a marketplace and what we realized is when it comes to discovery. Um, and getting, you know, using the attention of the platform that we have for more creators to be discovered. There’s a lot that we could do of making each piece of content created and convert it available to be discovered on other platforms. So if you think about internal discovery versus external discovery, internal is like, oh, you just finished reading this article or because you’re subscribed to James clear, you should also subscribe that in paris. You know, like that kind of thing. And that’s like what medium has done a lot of, and that sort of thing. Well, what we realized is the step we need to do first is the external discovery of the little things of like, oh, I just subscribed to Nathan’s list and it pops up and says like, hey you should tweet about it and we put these little moments all the way through. So every time you buy a product, every time you subscribe to a lip list um, like these little viral loops happen for the creator and basically we’d be getting ahead of ourselves if we’re like, oh let’s do it on our platform when really we’re trying to say like no, let’s get out there onto that’s automatically pushed to twitter on behalf of the creative, it’s automatically do these other things. So it’s basically external discovery first and then later do the internal, once the platform is bigger
Nathan Latka (40 : 38)
Before I move on to profit sharing and how you build a great team and keep great humans around you. Building convert, get touch on affiliates real quick. How much revenue do you pay out to affiliates in 2020?
Nathan Barry (40 : 49)
I don’t have that number off the top of my head. I feel this has been a huge channel for us and it’s been declining. Let’s see affiliates is growing. I would just say that other channels have been growing faster. So affiliates are how we grew, You know, substantially for a long time. And at one point affiliates were driving a little over 30 of all of our revenue. That’s probably dropped into the 20 20 range as like the well. So if we talk about flywheels or compounding, you know, these things, affiliates kicked off a lot faster and then now you like over time you get searched coming in lower or like more slowly, but then search turns into this
Nathan Latka (41 : 32)
Nathan Barry (41 : 33)
Yeah exactly. And so it’s like affiliates are still growing. It’s just that searches now outpacing it as far as the growth. Um So yeah affiliates have been absolutely massive and it’s just that like a lot of it is the type of business that we’re in, right, we’re selling to traditional businesses then like you had an affiliate program then at your Chamber of Commerce event. That’s not a thing anymore. But you know, you’d be like, oh I’m using converted. You tell like three of your friends but in the community that we’re in, write a blogger used us and loves us and Tells 10,000 of their closest friends. Like you can work it. So do
Nathan Latka (42 : 11)
You know how many affiliates you paid at least a dollar out to in 2020?
Nathan Barry (42 : 14)
You should be at least 3000
Nathan Latka (42 : 17)
Wow, okay. That’s you know sometimes you hear a lot of concentration these programs that is not, that doesn’t sound like a huge concentration.
Nathan Barry (42 : 23)
Yeah and the concentration is definitely there you know, and so there’s probably Only 100 they’re making at least $10,000 a month. But there’s something there that are making 25,000 a month or more. Um So yeah there’s there it’s a really really solid program.
Nathan Latka (42 : 43)
So just just make sure that Nathan. So if you’ve got at least 100 affiliates making 10 grand a month and some making way more. I mean that’s a
Nathan Barry (42 : 49)
Million. So it’s probably too high of numbers I have to get more. Okay, okay. I was
Nathan Latka (42 : 53)
Going wait a second. There’s no way that 60 of his cost bases, affiliate expenses.
Nathan Barry (42 : 58)
No that’s too high. So I have to have to dig in because it might only be 20 or so. But
Nathan Latka (43 : 04)
There is some concentration of what you’re saying is there is some concentration at the
Nathan Barry (43 : 07)
Top. So we’re paying out about 250 that we can figure this out about 250,000 a month to affiliates and paying a 30 commission. So that’s the easiest way to back into it.
Nathan Latka (43 : 18)
That’s great. That’s great. Yes. 200 dedicated affiliates. We can do an average into the 3000, but it’s clear there’s some concentration with some driving 25 grand a month and affiliate payouts.
Nathan Barry (43 : 27)
So we’re divided that out. We’re at about 830,000 in monthly. Uh, top line revenue driven by affiliates.
Nathan Latka (43 : 35)
Yeah, that’s okay. That’s a really valuable number. Thanks for sharing that. So are these before we move on to how you structured profit sharing? Are there any other flywheels that like you just found it and you love it? You haven’t run a blog post on it yet? You have a podcast, You probably want to share it, but I’m gonna pressure you anything you should ask
Nathan Barry (43 : 50)
About. Uh I think I think are free plan, you
Nathan Latka (43 : 54)
Nathan Barry (43 : 55)
Community. Um everyone is very adverse to free their like, no, I charge for a product, I sell things and we get paid for the value that we provide. We’re not those Silicon Valley startups that don’t have a business model or like are losing money on every customer and there is truth to both sides of it. But I I just read was so two things in 2018 I sat down with Ben chestnut, the ceo of mail chimp at the inc 5000 conference. He was super generous with his time. We just got to look out for 30 minutes in a hotel lobby and he was just like, look free was huge for us, that is the inflection point and it still is huge and it’s not a bunch of low value customers, it is those, but it’s all of these high value customers, they just show up and you’re like, where did this 100,000 subscriber account come from? You’re trying to attribute it and you’re like, you know, you’re not you can’t figure out like it’s not from paid, it’s not from search, you know, it just doesn’t make sense. And so you do customer interviews. Your product managers, sit down with this account, you find out that this marketer use the free version of mail, Jump spun up a free account. Did some stuff learn how to use the product grew up to, I don’t know, 50 subscribers, 500 subscribers, something that’s not material for male jump and then got a job at, you know, this big company who was using constant contact and he’s like, no, I’m not using constant contact for this. Let me go use mail chimp, which is a tool that I know how to use. And so basically freemium drove all of this where they would get big account switching over, knowing how to use a tool right away and he was just like, this is, this is mind blowing, this is amazing. And um we were in the process of figuring out how could we offer a free plan. We basically looked at it and said, look what if as a profitable company with plenty of cash in the bank and all that. We started to adopt some of these more like Silicon Valley startup methodologies and said, we don’t have to make money from every customer up front. We can play this long game because we’re profitable. Um And you know, so we launched that free plan and and honestly it’s doing so well. We in our models we expected at three free to paid conversion right? Um We came in at a five rate and we’re like that’s fantastic. Um And you know just to
Nathan Latka (46 : 18)
Be clear Nathan. Sorry that’s uh do you require sign up when they sorry, a credit card when they sign up for free trial.
Nathan Barry (46 : 25)
So um you can sign up for a free free account without a credit card And then if you want to try out like our automation product or something like that you can start a free trial for the paid version and that requires a credit card you know to go from the free version two. Trialing That on a 14 day trial working and
Nathan Latka (46 : 45)
Then you’re saying you expected three conversion and it got five,
Nathan Barry (46 : 49)
Three yeah 3%. So not 3% conversion on the trial but 3% of all free accounts converting to a paid account wow. And we ended up at five and we we see a lot of opportunity to bump that a little higher, maybe just six or 7%. Let’s let’s
Nathan Latka (47 : 09)
Talk about, you know, let’s wrap it with two topics here. One is keeping great people around you, right? You’re not venture back so you can’t just go pay people three million a year to stick with you. And that’s not a race that you want to be in any way. When did you launch profit sharing? And how does it work?
Nathan Barry (47 : 23)
Yeah. So we have iterated with a lot of different profit sharing things. Um We launched profit sharing, our very first team retreat uh as we talked about earlier,
Nathan Latka (47 : 33)
What year was that Nathan? Sorry? 2016
Nathan Barry (47 : 35)
- Yes. Number 2016. Okay. Um And we had grown from 100 K. To 300 K. In monthly revenue. We saved up three months of expenses in the bank. We’ve gotten to 50% profit margins through like the team being really lean and I wanted to reward the team for it and so we took 100 grand and paid it out to the team in profit sharing. Everyone was totally blown away. How did you
Nathan Latka (48 : 00)
Do that though? How many how many around the team at the .12
Nathan Barry (48 : 03)
We were up to 20 but six of them had been hired in the previous like 30 days. So
Nathan Latka (48 : 10)
Nathan Barry (48 : 12)
Yeah everyone participated. But for some people it was like 600 bucks. So
Nathan Latka (48 : 16)
That’s that’s my question is if someone right now it’s managing 2020 with 100 K. And they want to do this exact same thing. How do you decide Who to give the check? Size 2? Is there a formula?
Nathan Barry (48 : 27)
Yeah. So what we do is we do a six month period um is when the profit sharing is. And so for everyone that has been there for the entire period you’re eligible for it and we actually give partial credit. So we give out like if you joined we have people who We’ll join and then like profit sharing us 30 days later and they’re like you still get $500. You
Nathan Latka (48 : 49)
Know that’s amazing
Nathan Barry (48 : 50)
Because we want them to kind of have that taste of it and the person next you’ve got 17,000 or something like that’s because they’ve been with the company for quite a while. So in that pool um it is 75 based on your just a team member and everybody participates equally, and then 25 is based on time with the company. So we take there’s just a spreadsheet that has everyone start date, like so all the team members their start date, how many days since that? And it totals up. You know, the total days worked like ever. And then it distributes, you know, so just as x percentage of this pool should go to charlie, she’s been with us for four years to, you know, this person because they’ve been with us for one year, tristan. So like the profit sharing that we did uh in the spring, let me think The average was $11,000 per person. Um The smallest cheque was $3,000 for someone who joined really recently, and the biggest was I think 19,000. And so that’s kind of a swing that that you’ll get. We used to have something in there where we had another score for individual performance. Um And we took that out and we basically decided we’re going to set a high bar for performance. Just like to work at this company that everyone wins and loses together.
Nathan Latka (50 : 15)
Mhm, fascinating. Okay. And you’re paying this out, you’re doing this calculation once a month or once every six months?
Nathan Barry (50 : 21)
Every six months.
Nathan Latka (50 : 22)
Okay. Got it interesting. Okay. And so so you’re going to be doing this sometime soon in the next 30 days, as you close out? 2020, um what’s the total pool that you’ll be paying out?
Nathan Barry (50 : 34)
Um It will be 400,000. We, our goal was actually to lose money in the second half of the year. And
Nathan Latka (50 : 41)
Now you sound like a techcrunch, thirsty headline. chaser. V. C.
Nathan Barry (50 : 45)
Exactly. Our goal is
Nathan Latka (50 : 47)
To lose what
Nathan Barry (50 : 48)
We, we have not spent much on advertising as a company this year. We’re like ok we’re going to double down and we’re going to spend aggressively on, you know, Brandon product advertising and we we didn’t do that. We spent a bunch in the first half of the year but we were still way more profitable than we expected. We doubled down further in the second half of the year. And our accounting team last week was like guys were still profitable, you know like um so it’s gonna be smaller. I think the average check size is going to be five grand instead of Like the 11 than it was last time. But do
Nathan Latka (51 : 25)
You hear any pushback from teammates when they have already calculated what they think their check is going to be and then you guys decide you want to spend more breast lee, so there’s less profit to share and how do you balance that?
Nathan Barry (51 : 36)
Yeah so one we like the same all the transparency that you see on the outside. We have even more transparency on the inside. So for example um you know we have a full open book so everyone can see all the expenses, see what we’re what we’re spending and everything. Um and we just are really upfront about all of the trade offs in the business. So we talk about this like short term versus long term and what the effects are with compounded growth and everything else. So I think of compensation in two different ways that kind of makes a quadrant. So I think of short term versus long term compensation and I think of guaranteed versus performance based. So short term guaranteed salary, long term guaranteed is like 41 K. Match retirement. Um Short term performance based is profit sharing and long term performance based is equity. And what I think that does is it makes this whole like this matrix where it’s all covered and you’re taking care of it each way and the individual team member can get a feel for the trade offs that the business is making. So for example as a founder, I’m like let’s spend right now because let’s get on the growth to actually that we want on our path to 50 millionaire or 100 millionaire, are you don’t want a team that would be like no no no I want money in my pocket dictionary. Yeah. And so by having them participate in each side of it, they get to live in that tension that you as a founder living and they go okay yeah, let’s invest now because profit sharing will be bigger down the road and because um you know, my equity is going to have more value down the road. So
Nathan Latka (53 : 17)
What portion of 58 companies besides your own equity? What portion of companies of teammates own currently?
Nathan Barry (53 : 24)
Yeah, so I own 90 and the team pool is 10 of which seven is currently out located.
Nathan Latka (53 : 31)
That’s great, that’s great. Okay. And yeah, paid spin is growing dress and I’m just looking at a dress while we’re doing this. I mean you used to like may rank for like and pay for three and 25 keywords and now it’s at like four accents, like 1200 keywords. Um So clearly you’re running experiments there.
Nathan Barry (53 : 46)
Nathan Latka (53 : 47)
Interesting. How much we’re spending for months now on paid ads,
Nathan Barry (53 : 50)
I think about 400,000.
Nathan Latka (53 : 51)
Okay, interesting. And how do you mean is it working?
Nathan Barry (53 : 56)
Um it’s working decently. Um There’s a lot of things that we’re having to figure out, we’re able to drive a lot of free accounts. Um But one, for example, we found that our mobile experience isn’t as good as it should be and so, you know, inexpensive accounts, the driver, mobile accounts, but if you don’t have that great in at mobile experience, then you know, they’re not going to convert or they’re not going to have a good uptake. So there’s a lot that we’ve been trying to figure out. The other thing is we’ve been, we’re about to kick off some big new brand campaigns where we actually hired like a major marketing agency to produce video brand ads for us. We’ll see how that goes. Um but that’s
Nathan Latka (54 : 37)
Not why not hire a little videographers and send them to your creators and have them shoot raw, a little blurry videos that seem like really real and it’s like a cook and it’s splashing on the lens and
Nathan Barry (54 : 48)
Yeah, I mean there’s the whole, all kinds of different ways to do it. And I think we’re just excited to see actually, it’s funny. So the agency we hired as a mechanism and they’re based out of new york and Jason Harris who runs it. I don’t know him very well, but we’re both investors in the ghost town together and they do stuff for Alaska Airlines and Peloton and everybody else, you know? And so that’s one of those things of uh huh sort of keep it in the family in that way.
Nathan Latka (55 : 19)
Well, I like that. That brings me up to where I want to wrap this up, you know, going back to your ladders of wealth creation that you’ve modeled time for money, your own services, product type services, selling products and then there’s this next level, which is, hey not only Nathan is making money like you are making money from converted but your team members or two and they’re sort of capital leverage And so you know, you write your about your investments on your website like you know what I enjoy working with these people are my friends, I’m gonna give them capital and see what happens. Can you talk to me about that? Because I don’t see that on the letters of reparations or a chart you built, How are you thinking about literal, you know, capital leverage moving forward for Nathan Barry?
Nathan Barry (55 : 57)
Yeah, I think it’s not on the chart because it’s relatively new for me. You know, if you look at my, my earnings, they trail like can for kids growth, like my earnings trail that by a few years right. Of. Um that’s something interesting that my wife and I talked about, like, it was only three years ago that we like didn’t really have, you know, like the things were really tight, you know? Um, and so I think that’s something that I’m learning a lot right now and is just what that investing looked like and someone that I follow a lot in that space is Andrew Wilkinson from tiny. Um, it’s just fascinating to see him deploy capital. Um, and it’s just been been fun to read books like the outsiders or snowball about Warren Buffett or some of these other books of like, okay, wow, you know, it’s not just all angel investing and stuff like that. I have a, you know, a decent number of angel investments, not a lot, I think maybe nine. Um, but what I’m trying to do more of now would be inspired by like what Andrew is doing or one buffet style of like Great can I buy 10 of a company? Um And so like there’s an e commerce brand that I was able to do that with. Um which one year they’re called hard to their um they sell products for special needs um And they just have incredible opportunities to to grow and then you know we we acquired a a minority share of a company called spark loop, so we’re basically looking for What are these things were instead of buying a tiny percentage to an angel investment we could buy 5% 10 20%. Um And then it could become part of a portfolio that could eventually feed each other
Nathan Latka (57 : 47)
When when is the Nathan Barry convert kit rolling fund but private equity version, not the C version launching.
Nathan Barry (57 : 55)
I don’t know, probably the biggest thing that I’m torn on right now is chasing after some of these fun opportunities. Like I have a real estate business here in Boise that I started with two friends mainly because they had all this energy and the desire to move up the ladders of wealth creation but needed some more help and needed capital and so to do that with them has been really, really fun. But then at the same time all the opportunity to convert it, like let’s say if we’re valuing converted at seven X A R R eight XR or something like that
Nathan Latka (58 : 28)
Conservative, even for what you built,
Nathan Barry (58 : 32)
Then you’re looking at what it takes to add an additional million dollars in value in enterprise value for converted versus what it takes to go Making $1 million dollars somewhere else. And it’s just an order of magnitude more effort to do it in real estate investing or something that because convert has so much momentum. And so it’s an easy trap to fall into. Like I’ve made this money here. Now let me go to this other thing when if you just look at the the coastal leverage, just straight up leverage, then the answer is this has worked. So let’s keep doing it. But in more effort there go faster. Um So it’s a balance between what’s fun and like a little bit of a diversification and like no, just keep doubling down and can work it.
Nathan Latka (59 : 17)
Last question. And then you sent out an L. Y. To buy a company this morning, Which company was it for?
Nathan Barry (59 : 21)
You can tell you, I thought it would be
Nathan Latka (59 : 25)
The answer. So let me back up. How do you go about finding companies you centralize too?
Nathan Barry (59 : 30)
Yeah, that’s a good question. So it’s things markets that we’re spending into, uh, something that is a good fit. Something that we hear a lot from our customer base of like if we see integrations popping up a lot. Um, If we look at Sarah three Year Roadmap and there, if there’s a, a something that we’re planning to build, but it’s a few years off and then we see someone who is getting good traction in that space, right? Our customers are already using them. Then it’s like, oh, we could accelerate a plan two or three years out if we buy them today, especially when in any, in any software company, uh, engineering time is the single greatest constraint. And so there’s so many opportunities to chase and you just have to take the Richard Branson quote of like opportunities are like buses, there’s always another one coming. Um, and so you end up in a point where capital is more available than like skilled engineering, time to apply to problems and that’s when acquisition start to become interesting of like, okay, I can accelerate this plan um, You know, for $1 million dollars rather than having to spin up a whole new engineering team and then spent a year building it
Nathan Latka (01 : 00 : 49)
Guys. There you have it Nathan berry 2005. A long journey. When his parents dropped off, he showed up with the van out front of 100 and 20 bucks of woodworking sales. Quickly got into college early said, give me to do with what I got to get done. Then landed a $10,000 contract marketing contract, end up dropping out of school to pursue that and eventually turned those professional services goods into a couple of $1,000 a month. But it really changed in 2015 when you started really focusing on convert kit community building and that first team retreat in 2016 when they paid off their first profit sharing to employees at $100,000. Now, 58 convert kit team members, strong, focused on building the creator economy. They’re empowering these creators in many different ways and they continue to drive growth 19 million last year and run right up to $25 million. Run rate today, totally bootstraps Nathan. Very thanks for taking us to the top.
Nathan Barry (01 : 01 : 35)
Thanks for having me.
Nathan Latka (01 : 01 : 36)
Boom guys, cut Nathan. What do you think man?
Gglot (01 : 01 : 39)
Transcribed by Gglot.com