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#96: Nathan Barry [Relentlessness] – from $150K/yr in ebooks to $30M in ARR with ConvertKit

March 29, 2022

#96: Nathan Barry [Relentlessness] – from $150K/yr in ebooks to $30M in ARR with ConvertKit
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Investigating trends of the creator economy with the CEO of ConvertKit


Nathan Barry is a creator, author, speaker, designer, and the founder of ConvertKit. ConvertKit powers the audiences for creators like Gretchen Rubin, Chris Guillebeau, Pat Flynn, Tim Ferriss, Carrie-Anne Moss, and Tim McGraw.

Prior to ConvertKit, Nathan made over $150,000 from self-published books in less than one year. His book Authority is still often referenced within the creator community.

In this episode, we talk about Nathan’s wild year of selling ebooks, trends he’s seeing among creators today, a crucial business model decision every creator should make, and why his relentlessness helped make his decision to double down on ConvertKit look very smart in retrospect.

Learn more about Nathan Barry

Follow Nathan Barry on Twitter

Subscribe to the Nathan Barry Show

Start a trial of ConvertKit (affiliate)

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Join the Creative Companion Club 🤫

Follow Jay on Twitter

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Transcript

Nathan Barry  00:00

That second question is, have you given this every possible chance to succeed? Because if yes, if you have, you really want it, you've given every possible chance to succeed your best effort, and it hasn't worked. Like it's time to shut it down and move on.

 

Jay Clouse  00:17

Welcome to Creative Elements, a show where we talk to your favorite creators and learn what it takes to make a living from your art and creativity. I'm your host, Jay Clouse. Let's start the show. Hello, welcome back to another episode of Creative Elements. I want to start this episode with a special announcement. This past week, I launched a membership community for creators who want to go pro. It's called the Creative Companion Club, named after my newsletter Creative Companion, and it's built to help you become a professional creator. I think it's an amazing time to be a creator because it's never been easier to be paid for the things that you make. And I love the term creator because of its inclusiveness. If you self identify as a creator, you are a creator. If you're making things, you are a creator. But being a professional creator, is a little bit of a different story. Professional creators are financially rewarded by their work. Professional creators approach their work more methodically and with a certain rigor. Professional creators are dedicated to making their creative work, what they spend their days working on. And in my experience, there's no better life than that of a professional creator. So if you aspire to making this creator thing work for you, I want to help as many people become professional creators as I can with this podcast, with my newsletter, and now with this membership community, the Creative Companion Club. But I can't help you become a professional creator with a pre-recorded course. And I can't help you become a professional creator with a single cohort based course either. Becoming a professional creator requires a lot of skills, a lot of projects, and above all, time. The best way for me to support you on that journey is through an ongoing relationship, a place where I can share with you what I'm learning, including the changing landscape for months, if not years. That means that inside the Creative Companion Club, I'm extremely active in the forum and indirect messages. I host a weekly live sessions including office hours in one on one member hot seats. The Creative Companion Club is where I'm able to take my experience and insight and personalize it to your specific situation. And I am loving the interactions I'm having in the community. So if you want to learn more about the Creative Companion Club, visit joinccc.com or click the link in the show notes, that's joinccc.com. All right, well today on the show, I'm talking with someone who shares a lot of the same beliefs as I do. And he's also one of my most requested guest of all time. Today, I'm speaking with Nathan Barry, the founder and CEO of ConvertKit, the leading creator marketing platform.

 

Nathan Barry  03:10

My name is Nathan. I'm a designer, entrepreneur boundary startup person, and welcome to my YouTube channel. I live on a farm in Boise, Idaho with 30 chickens, 12 ducks, 10 goats, 3 kids, 2 pigs, and 1 wife.

 

Jay Clouse  03:30

That's the opening clip to Nathan's YouTube channel, which probably under sells his role of CEO at ConvertKit. Just a tiny bit. I love ConvertKit. I'm a proud customer and affiliate ConvertKit. And email generally are at the core of my business. And you may have heard of ConvertKit before, is the email platform of choice for a lot of creators that have been on this show. But what you may not know is that prior to starting ConvertKit, Nathan was building quite a name as a creator himself.

 

Nathan Barry  03:59

Yeah, so my business as a creator almost like didn't exist in early 2012. And then the end of 2012 into early 2013. Like, was one of the craziest times of my professional career.

 

Jay Clouse  04:12

We'll talk about this at the beginning of the interview, but Nathan was writing and selling e-books in 2012 and earning more than $150,000 in one year. And then in 2013, Nathan started building ConvertKit as a side project.

 

Nathan Barry  04:26

So what I expected to have happen was to start ConvertKit and have it you just like steadily grow, you know, 1000 a month, 2000, 5000, right? Recurring revenue only goes up or so I thought. What actually happened is that we got to about 2000 a month in revenue, and then it stayed flat and then gradually declined. And so I had this moment where a friend of mine Hetan Shah was saying, hey, like you've been working on ConvertKit for a year and a half now. You either need to like shut it down and move on to something else, or double down on it and really make it successful.

 

Jay Clouse  05:03

We'll talk about that decision in the interview as well. But thanks to Nathan's commitment, ConvertKit has grown a lot since 2013. Today, the company is at nearly $30 million in ARR, which means annual run rate, which is how much they're on pace to earn this year based on their current monthly recurring revenue of $2.5 million. And if you're wondering how I have these numbers, ConvertKit actually shares this information publicly at convertkit.baremetrics.com, which I've shared in the show notes, you can see their full subscription metrics going all the way back to the start in 2013. And if you look at those graphs from 2013 until now, it's pretty wild just to see how steadily they've grown revenue since then, especially since 2015, which Matt Ragland mentioned in episode number 36 of the show,

 

Matt Ragland  05:51

Actually, the day or maybe the week of me starting just my, just my part time, just my contract at ConvertKit was the week that Pat Flynn's article, Why Switch From AWeber to Infusionsoft to ConvertKit, came out. And for six months after that, so from October, November, like six months forward, ConvertKit when I came on had less than 500 active customers, and then we doubled every month for the next six months.

 

Jay Clouse  06:22

So in this episode, we talked about Nathan's wild year of selling e-books, trends he's seeing among creators today, the crucial business model decision that every creator should make, and why his relentlessness helped him make his decision to double down on ConvertKit look very smart in retrospect. I'd love to hear your thoughts on this episode. As you listen, you can find me on Twitter @jayclouse or on Instagram @creativeelements.fm, tag me, say hello, let me know that you're listening. And I also want to give a shout out to Nathan's podcast, The Nathan Barry Show, which is in my own heavy podcast rotation. Since you like creative elements, you'll love this show too. So now let's talk with Nathan.

 

Nathan Barry  07:07

I started blog in 2011, for 2010, 2011, you know, didn't know what it'd be about. In early 2012, I decided that I was going to focus in on designing iPhone applications as what I talked about and taught. I like kind of starting to build a little bit of an audience around iPhone app design, but we're talking in the low hundreds of email subscribers. And then I launched a book called The App Design Handbook on September 12, 2012. And I, you know, written that book in the six months prior, rolled it out, I did 800 email subscribers, 798 if we want to be precise.

 

Jay Clouse  07:43

I can't believe you know these exact numbers and dates.

 

Nathan Barry  07:47

So I launched that, my goal from the book was to make $10,000 in lifetime sales. And I thought I'm gonna have this book. And it's going to be a great thing for people to hire me to design iPhone apps for them, because that's where my main income source was. I actually never took on another app design client, because the book sold $12,000 worth in the first day.

 

Jay Clouse  08:09

Wow.

 

Nathan Barry  08:10

And 18,000 by the end of the week, and it was just wild.

 

Jay Clouse  08:14

What was the price point on that?

 

Nathan Barry  08:15

The book itself was $29. And then if you, I had made these additional packages, which is something that I became really well known for, like in that 2012 to 2014 timeframe was a lot of like packaging, positioning pricing, sales page design, because I also took those long form sales pages that like direct response copywriters were doing, and I made them beautiful. And so everyone was like, wait, you can take like great design and direct response copywriting and combine them. And so I've done that. But one of the things was, I did three different price points at a time when people were doing usually just one price. They're saying, hey, this book is 20 bucks, or the score is 50 bucks. And I did three price points so it was the book for 29. And then for 79, I believe it was the book plus like resources, you know, my Photoshop files, my X code, you know, Asset Library, all the tools that I use. And then the top package was that with a bunch of videos and interviews, which I believe was 149 in that one. And that pricing method doubled revenue over what I would have done with just, you know, just the book. So it was huge. And then another quick thing that happened in that is I've been trying to write this book for a while and had all these false starts and I wanted to do it and it just didn't work out. And so I made my own iPhone app to help me track a habit of like write every single day. Because Chris Guillebeau inspired me of like this idea of write 1000 words day, show up consistently, make it happen. And so I had done that. And I was like 80 days in a row of writing 1000 words a day when the App Design Handbook published and next day, this app that I'd made called Commit, popped up and was like, are you gonna write 1000 words today? And I remember thinking, no, I finished the book. Like it's done. And I think that next day I wrote, like a wrap up post, here's how the launch went, kind of kept the momentum going. And the day after that, I was like, okay, I don't have anything more to write. You know, I did it. And then I thought, well, this was fun. What if I write another book? And so two days after publishing the App Design Handbook, I sat down and started writing. And 90 days later, I launched a book on designing web applications, which is another area I'd spend a lot of time that launch to a bigger audience. It did $26,000 in sales in the first day. And so it was just like this wild time. And then two weeks after that, I started ConvertKit on January 1st, 2013. So to give you an idea, like that was, that's the context of what was going on then. And it was like, the most prolific time in my life and pretty life changing as far as revenue and audience and everything else.

 

Jay Clouse  11:02

Yeah, it's wild. I'm trying to put myself back in 2013, because I wasn't in this world at that time. But you know, adjacent to it. So what was the, you know, creator sphere, like in 2013? Who are you looking to for inspiration or a model, if anybody?

 

Nathan Barry  11:20

Yeah, there were a lot of people. So first, Tim Ferriss who pulled me into this world, initially, of like, reading 4-Hour Workweek, I remember being on a camping trip in like, 2010 maybe, something like that, and discovering this world. From there, from following his site, came across Chris Guillebeau. He ended up like really providing the blueprint of how to do this, you know, writing a blog consistently, building an audience, self publishing, all of that. So I was following him, I was following Jason Freed and DHH from Basecamp, their writing, they'd self published some stuff. It was really two other designers, though, named Sacha Greif and Jarrod Drysdale, who in March of 2012, they each published design e-books, to really small audiences. And they happen to like they didn't know each other. But they happen to publish their, their books on the same day and both of them made it on Hacker News, which was, you know where, I was paying attention everything, yeah. Like the chances that you're working on like, self published design e-book, and another one publishes on the same day. But what was really cool is that they had very different pricing methods. So Sacha price his, it was called Step By Step UI Design, it was relatively short, like, you know, like an extended case study, basically. And he priced it for $6 for just the book, or $12, if you wanted the Photoshop files with it. And Jarrod wrote, like a full length book on I think, called Bootstrapping Design. And he priced it at maybe $29 or something like that, maybe 39. And then Jason Cohen, who's the founder of WP Engine, and now a good friend has been at ConvertKit customer for, I don't know, like six years now, seven years, he saw that we saw, you know, same day, similar size audience both show up on Hacker News. And he's like, both of you come on my blog, and write a case study about why your pricing method is better than the other person's. And what was amazing about this for me is they revealed their numbers, you know, and and I think that Sacha made like $6,000, and Jarrod made like $8,000, in their first 48 hours. And so I saw that, and I saw, you know, we talk a lot about representation, like how important it is to have a diverse speaker lineup or you have leadership in a company where you can see yourself in that person. And like you and I being white guys, we have a lot of examples out there, where we're like, okay, I can see, you know, see myself in these executives of that company, or whatever else. This was an interesting example of representation for me, because I saw people represented who had really small audiences, who were earning a meaningful amount of money in my exact field with something that I knew I was capable of doing. So it wasn't like, you know, the guys at Basecamp saying, yeah, we self published a book, we made $400,000, you can't do and I'm like, I can't I don't have 100,000 people on an email list. I don't have this audience. But in Jarrod and Sacha, I saw myself in that and I was like, oh, I could do that. And they're both right and they're both wrong in their pricing method. And so I basically combined, but there isn't really that as far as people that I was following. Chris Guillebeau was a huge influence. And then both Jarrod and Sacha, with their, like transparent playbooks and all that.

 

Jay Clouse  14:37

Crazy, okay, so you started ConvertKit that January. I know you went on to write one more book authority, which is still referred to quite often today. How did that process go real quick before we get into the next steps?

 

Nathan Barry  14:51

Yeah, so I published Authority in April 2013, so four months after publishing the App Design Handbook, so if anyone is keeping track that was 3 books published in seven months.

 

Jay Clouse  15:03

That's so fast. Yeah.

 

Nathan Barry  15:04

Which is ridiculous. But it goes to show when you write 1000 words a day that has a moderate amount of content per day, like an hour, maybe a little more of solid writing, of, you know, focus, not like pretending to write, not starting to write and checking Twitter, you know, all that, but like, of actual focus writing time. And so like, when you think about percentage of your day, it's not that much. But 1000 words a day adds up really, really fast. Like, if you think about, you know, a good length for a self published book is 25,000 to 40,000 words, you know, you can, you could write a book, if edited and all that, right, but you could write a book every four to six weeks, if you had enough to say, and turns out, I had a lot to say. So in that time period, yeah, I started a software company and released three books in that time period. And and Authority really came about because people enjoyed the design content. But then they were like, wait, tell us more about this whole self publishing thing. How does it work? How do you build your audience? And now one of my favorite things, Authority is an older book now. And it could use another refresh or a rewrite for modern times, though a lot of the principles still apply. But one of my favorite things is how many creators I follow now, or who are friends now who got their start from that book. Like, one example is, we have a little farm like a homestead. And so there's a critically following named Justin Rhodes, who my wife is a big fan of, he has like a farming and homesteading YouTube channel. At this point, I think that like 900,000 subscribers on YouTube, and it's just like, it's an amazing thing. And in the very early days, he got to start after reading Authority. And so it's fun that like, we'll be sitting there with a family watching their full length movie that they made, you know, and then knowing that that creator who, you know, kids love following, and all family loves following, you know, like, help find their path because of Authority written in 2013.

 

Jay Clouse  17:07

After a quick break, Nathan and I talk about his decision to double down on ConvertKit at the peak of his own creator business. And later, we talk about trends and predictions you seeing for creators building today. So stick around and we'll be right back.  Welcome back to my conversation with Nathan Barry of ConvertKit. Before the break, we talked about Nathan's start as a creator himself, earning more than $150,000, in one year of self publishing books in 2013. But then, in October of 2014, he decided to go all in on ConvertKit, which was only earning about $1,000 per month at the time. So I asked Nathan, how we made the decision to walk away from what seemed like an excellent content business, to focus on building ConvertKit.

 

Nathan Barry  17:51

Yeah, okay, so going back to that decision. So I wanted to, I wanted to not just talk about designing software, I wanted to actually, you know, actively be building up that for myself. I think there's something that can happen, where you switch from being from doing to teaching. And then which is a fantastic switch to make or like adding the teaching element, I highly recommend it. But you can end up where you only are teaching, and you stopped doing and I, I still wanted to be in the execution mode. And I didn't want to just move into like teaching case studies, I liked having my own material to pull from. And so it's part of why I wanted to get into software or run my own test company. The other thing is I wanted recurring revenue, because these book launches would be like 10s of 1000s of dollars, and, you know, in a day or in a month, and then a drop off to, you know, a few $1,000, like it was very spiky revenue. So they had these books and courses that were successful. But ConvertKit at the time, you know, was costing me more money to run than I was actually making from it. And it was not a clear decision. And so what I did, I like to make little frameworks or mental models for things. And so I made a framework, just asking two questions, of which basically, to determine should you shut this down or not? And the first question is, do you still want this thing, whatever it is, as much today as the day that you started? Because we all know those projects where you are like, oh, this is gonna be so fun. Let's dive in. Like it's just the only fuel behind it is enthusiasm. And and that early momentum just fizzles out. And so if you're in that position, you've been working on it for a while, whether a month or a year or five years. You like I'm like, I don't actually want this anymore. This thing that I'm striving for, I don't want and it's totally fine to just walk away. In my case, it was like, do you want to be the CEO of a software company? Because you don't have to be. And I thought about it. I was like, yeah, I still want that. I want that new challenge of growing and building software to real company. And so it's like okay, great so on it, move to question number two. And that second question is, have you given this every possible chance to succeed? Because if yes, if you have, you really want it, you've given every, like possible chance to succeed your best effort, and it hasn't worked, like it's time to shut it down and move on. Maybe you're not the right person for it. Maybe the timing isn't right. The idea isn't right, like any of these things, and you in good conscience can move on. For me, the answer was no. And so there was a disconnect between what I said I really wanted, and the effort that I was putting in because I was working on it. Part time, I had this other business that you know, the books and courses side of it, that had, you know, more than half of my time. And I really wrestled with that disconnect of like, your actions and your words don't match. I just think it's an interesting exercise as a creator, to look for all the places in your life, where your actions and your words no match, or your actions and your intentions don't match. I say it's a good exercise. It's a painful exercise. Some really good exercises are painful. And so for me, it was like, okay, I know that if I shut down ConvertKit now, I'll always wonder, could I have made it work? And that's not something that I really want to live with. That's not a question that I want to have. And so I made the decision to double down on ConvertKit. And I knew that, like the half effort wasn't going to get it done. And so that's why I decided to shut down the not to shut down, like I left them running, you know, the books and courses, but I didn't put any more effort into it. So yeah, that was kind of it was quite the decision. And it worked out in the long run, but it wasn't obvious that it was going to.

 

Jay Clouse  21:48

That disconnect you're talking about is so relatable, probably to everybody listening to this also because I mean, a lot of creators and I would even say I'm in this camp a lot of times where, you know you're trying to do and you want that to be big, but we have this disconnect of I'm not doing everything I could be doing for that to be successful. Instead, I'm distracting myself from some of the hard things I could do to help it with starting a YouTube channel now, alongside my newsletter, or trying some other, you know, add on to this thing, as opposed to maybe spending more time advocating for the thing I'm making already. In your case, was it I need to put all of the available time I have in my life towards this? And that's what would solve the disconnect. Or were there some hard tasks you were just completely avoiding?

 

Nathan Barry  22:33

Yeah, probably both, I was trying to start something that was remarkably difficult. And I think I was downplaying how hard it would be. Especially, there are creators who like grind it out for everything, I'm probably, to some extent one of those. Okay, I have a whole, you know, did that sounds like the books came out of nowhere, but there's like 10 products that we could do, or 8 products before the books, right, there's a whole a whole list of things. But at the same time, the books came quickly, like the momentum from it. And so then I think I assumed that like, great, you know, I've got like a Midas touch here. You know, everything is going to I've learned the secrets of building an audience and all of this and like, it was just be easy from here on out. And so when I brought that mindset to grow in ConvertKit, like it didn't work. And I think a lot of creators run into that where, you know, the struggle for a while, and then they hit something that works. And they've learned, you know, they hit this inflection point that goes up. And then at some point, that momentum will stall out. And then they're trying to use the same skills and all that to get to the next level and, and it just doesn't work or they're expecting it to be easy. And I was expecting it to be easy, because it's like, look, I now have an email list of 5000 people, like this is amazing. And so I had to go back to putting in the hard work, understanding why people buy this product, you know, doing direct sales, manually migrating customers, hiring and recruiting a team, you know, all of these things, because it ultimately is a new project and it needed a lot of new momentum. So yeah, it was it was quite a time. But like, actually, from the decision to double down at ConvertKit to turn around the rest of the company. It happened pretty quick.

 

Jay Clouse  24:21

I want to flash forward here to today. And we'll juxtapose you know that that moment in time a little bit. There are a lot more tools available to creators today. There were in 2013.

 

Nathan Barry  24:32

Right.

 

Jay Clouse  24:32

So it seems like that the means of creation has made it easier to create. But I'm curious if you think that it's net easier to be a full time creator because more means of creation. Also, more people trying to create more noise, more competition, yada yada yada. So I'd love to hear you talk a little bit about you know, as the last eight years have passed, do you think it's becoming easier or more difficult to do this creator thing full time?

 

Nathan Barry  25:00

I think it's becoming easier. And I hope I'm not just one of the people who's like back in my day, you know, we had to walk uphill in the snow, and all of that. So things that are, well, a couple things, if our goal is a creator, there's a lot of goals, a lot of reasons that you might want to do it or you do. But let's say it's we're targeting earning a full time living, there's a lot of factors in that. One is that the price points of products has actually gone up remarkably, years ago, when people were selling books and courses and all of that, you had a lot of e-books that for $10, a lot of courses for $50. You know, $100 was an expensive course. These days, if someone's teaching a cohort based course, you'll see them do the first cohort for $500. And then the second one will be 1000. And then the third one will be 1500. And then before you know it, they're running a very professional, very well produced cohort based course. And these are like the best people at it, right? But they're $3,000 is fairly, like, it's not unusual if I come across a wall for your scores at that price point. And so when you think about the amount of money that you can make with that, now you have course launches that are doing $2 million, and they're maybe running that course twice a year, or even bringing it back to a much smaller level, just being able to charge, like $39 for a book, if it's something really tactical in your industry versus years earlier, it only being 10. That means it's that much easier. If your willingness to pay is so much higher, and so much easier as a creator to earn a living. It's still not easy, like this is a very hard path. But there's a lot more there. So there's that side of it, just sort of the economics of the space. And then the other side is the tools. Like we're going to get to a point where every single service out there is offering a way to collect payments. You know, when I was first looking at launching books, it was like, do I use ClickBank, E-junkie, you know, like the list of tool, it was really hard, are you gonna embed a PayPal Buy button on your site, you know, it's coming on. Right then there are tools like Gumroad, that made that a lot easier, you know, now to collect payments in a, in a good way but email as well, right, you're, you're gluing together all these products with, you know, MailChimp or AWeber, or something like that. And so, you know, now, right I'm, I'm in the place where I'm building these tools for creators. And so part of what I'm doing is trying to make it as easy as possible. And so like with ConvertKit, as a creative marketing platform, it's where you can grow your audience in one place. You can have the automation and the emails to connect and build a relationship with them. And then you have converted commerce, where you can earn a living on one platform. And so it's all about how do we eliminate decisions that a creator needs to make so they can go back to focusing on growing their audience and refining their craft. So I think it's easier, but it's still not easy.

 

Jay Clouse  27:58

Totally. I imagine you are either sitting on a mound of like, actual reported data, or just like interview anecdotal data from creators to talk about the problems they have today, still, most painfully, what are some of the biggest problems you're seeing today for creators?

 

Nathan Barry  28:16

There's two that immediately come to mind. One is that there's more platforms than ever before. And so knowing where to spend your attention is really hard, right? I'm supposed to have a podcast, a newsletter, a YouTube channel, probably an Instagram. I don't know what else and then like, TikTok, you know, oh, shoot, where's my TikTok channel, you know, and everywhere you turn, someone is blowing up on one of these things. And so you're just starting to get momentum on Twitter. And then you hear about the woman on TikTok, who is making $50,000 a month selling Excel courses, right? And you're like, shoot, okay, I guess I need to be doing TikTok now. And like that little bit of momentum that you had with Twitter, like that goes away, and you don't even notice that you you got it. And so there's more ways than ever to grow an audience. And that brings to the second thing, which is, there's more places for your attention to go. And so like a lot of the bloggers in 2010, 2012, there was a lot of search traffic, a lot of guest posts, a lot of getting people to subscribe to your RSS feed and email list. And there just wasn't the same level of opportunity. But it also meant that that attention could be narrowed in and you can build that audience. Oh, that's the other thing that's changing is audience sizes are remarkably bigger than they were 8 to 10 years ago.

 

Jay Clouse  29:40

On average or like at the top end of the spectrum?

 

Nathan Barry  29:43

Both, like people are building, you know, an audience of 1000 email subscribers or 10,000, so much faster. And then the big audiences are way bigger. Like I remember, you're talking to the Chris Guillebeau of the world or like Liova bouta he Ranzenhofer but we're still friends than habits, Time Magazine's Top 25 websites that make the internet great, you know, like that level of thing. And back then I think get 10,000 subscribers. And that was one of the most popular, most famous websites. And now there's all kinds of websites that you've never ever heard of, and they've got 10,000 subscribers, whereas the in the, the top end, these big email lists, so the people that you've, you know, paid a lot of attention to you might have their book on their desk, that kind of thing. They're in the millions of subscribers. And so, like just audiences are are much bigger.

 

Jay Clouse  30:36

Do you think that subscribers today are more willing to turn over their email address and maybe less willing to pay as close attention to theirs? Like, what else has changed there? Do you think that the the subscriber quality has degraded on average?

 

Nathan Barry  30:53

It's hard to say, careful about is drawing a macro trend from a micro data source. So something that happens naturally, with audiences as they grow is that the quality overall degrades. So for example, if I have 500 people on my email list, the open rates going to be super high, partially because of recency, right? A lot of these people will just discovered me. And they're, they're really engaged, they're interested. And so if you think about each individual person's interest, starting high, like when I came across Chris Guillebeau, I read every single article on the site, over like a two week period. So imagine that subscriber who's like, wow, Jay is the best thing ever. And then over time, like on average, that's gonna gradually decline, like, yeah, Jay is a, like a good source for content, I like following his stuff. And then some of those people will even drop off. And so when you have a small list, most people are joined very recently, and their excitement is probably with the highest. And it's not getting diluted by, you know, a whole bunch of other people. And so what tends to happen is, as that audience grows, the average quality of the subscriber declines, and the average interest of the subscriber declines. So I think what would be natural for a creator to do is saying that in this path from 500 subscribers to 50,000, they might see the interest in quality decline as a percentage. And it would be easy to assign that to the industry, like, oh, over the last five years, you know, people pay less attention. But it might just be a micro trend about their list. Because I think people are still building very rabid fan bases today. And so I don't think that there's an average decline. But I do think that the number of people interested, like, the total addressable market, if we're writing about productivity, or fitness, or you know, any other thing, you know, we're podcasting on any topic is remarkably bigger than it was before.

 

Jay Clouse  32:52

So this trend of there are more platforms than ever for you to invest your own energy into creating content. What's your recommendation for folks who are feeling that tension right now? Do you think it's prerequisite to be on multiple of these platforms? Should I pick one? Is there any way to prioritize one over the other?

 

Nathan Barry  33:09

Yeah, we were talking before we hit record, about how I have a YouTube channel. And I make jokes on there about how like, I knew nothing about YouTube, and like, you should never follow my advice on what to do for growing YouTube channel.  I think people are gonna come to this channel, they're gonna be like, I have no idea what this is about. All the advice on YouTube says you should focus your channel. I didn't. And that's why I don't have any subscribers.  And the way that that plays into my approach, as a creator, is I think you should have a couple things. So first, you should have an email list. That is your way to reach your fans. So if you think about a hub and spoke model, the email list newsletter is the hub of what you're doing. But emails, like they have one fatal flaw. And that's the email does not have built in discovery, YouTube, Twitter, Instagram, and especially TikTok have built in discovery, like in a huge way the best content rises. And so what you're seeing is, you know, on email, you own that relationship, you're gonna have great engagement, you can have this long term relationship with fans, even segment and you can add details to a profile and all this stuff, but it doesn't have discovery. And so now you need to choose, how am I going to attract new fans? Back in the old days, we would guest posts on other sites. You know, you'd have your blog roll over on the side and link over to your friends and all that. Today, the best way is usually one of these platforms with distribution, so Twitter, Facebook, Instagram, YouTube, that kind of thing. So what I would do is have one primary channel for growth. In my case, I've chosen Twitter. That is where I'm going to attract the most people to my audience. And that's where I'm focusing. And my goal is to grow Twitter as big as possible, and then funnel those people into my email list so I can have a long term relationship with them. And then you can choose a secondary distribution source, right, of Instagram, YouTube, etc. And that's one that you might play with, but you're not actively working on. I actually can't decide in this moment, if mine is YouTube or a podcast. But podcasts are terrible for discovery as well so yeah.

 

Jay Clouse  35:35

I can't wait to talk you about podcasting here in a few.

 

Nathan Barry  35:38

We'll get that, you know, but basically, the idea is to have a primary, and then something that you're playing around with and learning, but you're not putting as much attention into it, and then have the email as the hub. Because where people make the mistake and what I did for a long time, was equal effort into Twitter, YouTube, Instagram, and Facebook. And that does not work. So take all of that effort and put it into one of the platforms. And so to give you an idea, I've slowly built my Twitter audience, up to about 35,000 followers. And then over the last, like over the summer, I said, I'm going to start writing some threads, I'm going to see about how can I actively grow this. And so that led me take it from, like, 35, 38,000, up to 40,000. And then, the last six weeks in particular, I said, I'm going to focus everything on this, I think I understand how this whole system works. Forget everything else, I'm going to focus on this one thing. And I've added 10,000 Twitter followers in the last five weeks, six weeks, and I'm like, okay, I'm gonna ride this all the way to 100,000 subscribers, and then I'll see about if I want to put time into another channel.

 

Jay Clouse  36:49

If you're not a short form video person, it feels like Twitter threads is the highest ROI, third party distribution platform out there right now.

 

Nathan Barry  36:59

Yeah, I think so.

 

Jay Clouse  37:00

So that's, that's, that's my diagnosis.  When we come back, Nathan and I talk about the trends he's seeing work for some of today's biggest creators, predictions for new opportunities, and an essential decision creators need to make when building their creative platform, right after this. A welcome back. One trend that I've been noticing over the last year or two is a lot of collaboration between creators. I don't know if it's necessarily a new trend, or if I've just gotten better at noticing it. But it definitely seems to be happening a lot with a graders that I look up to. So I asked Nathan, if he's seeing the same and what else he's seeing as trends amongst the best creators today.

 

Nathan Barry  37:38

I think the creators that rise the fastest have probably two key attributes. One is they're working way harder and way more consistently, than most other people. Right? Because you're gonna see them, it'd be the, you know, the iceberg thing where you're only seeing what's at the tip of it. Right. They've been working for a long time, and they break through above the surface. And you're like, wow, overnight success. And they're like, Okay, well, here's the five years where I was learning the craft, you know. And so that's the first one. The other attribute is like being really good, and very deliberate about collaboration, working with other people making friends in the space. This is why I miss conferences, so much, because conferences were amazing for that, where you just walk away and you're like, I didn't, I don't have any partnerships. But now when I send this person email, it's like, oh, yeah, we're at that dinner with all these people, you know, so it kicks off so many things. So I think of like Colin and Samir, they're YouTubers, who now have a channel ALL ABOUT THE CREATOR economy. They've been doing this for a long time, because they had a, they had a YouTube channel about lacrosse. And they built that up, they learn YouTube, they learned that, you know, that whole craft. And then what they did is when they started their own channel, it took a little while, but they have really partnered with like the with a lot of people, their channel, just past 500,000 subscribers, but the level of reach of people that they're having on the show, you know, in their podcasts on their channel, and everything else is huge. Like they're doing stuff with Casey Neistat with Lilly Singh, with you know, Jack Conte from Patreon it comes on. And as a guest, and I think a big part of it is a ton of deliberate effort. And then also like they purposely based themselves in LA. And so it's much easier to connect with those people. So they're putting in that time and effort. And so I think, I think partnerships are huge. Getting to know a lot of people makes a big difference, and then they're sharing your stuff. They're coming on as guests on your podcast, you're building that reputation and showing up, you know, in person is an amazing way to do that. So yes, partnerships really, really matter. But it's a lot more organic than I think people assume that it is.

 

Jay Clouse  39:54

Yeah, when we're talking earlier about the the disconnect between I said I really want this but I'm not doing the things that I need to do to give it The best chance for me that comes down with this podcast because this podcast is the lead of what I want to do. I've interviewed 100 Incredible creators, and I've barely asked for them to even share the episode that they were feed, right. You know, it's like, there's so much more I could be doing because I had great interactions with these people. There's some number of them that I would feel comfortable saying, hey, let's collaborate on something or, Hey, could I even have 30 minutes to discuss the strategy with you on what I'm trying to do with the podcast? And I don't do it. And that's the type of thing where I feel like I'm limiting myself because I'm not doing the am I doing all the things I could be doing to share the show?

 

Nathan Barry  40:37

Right, the promotion side? So here's something that I learned about Twitter, right? If if someone hears the Twitter thread thing, and they're thinking like, Oh, I could do that. Right, which I guess to to Twitter takeaways that I had. One, half of my Twitter threads are just blog posts that I wrote years ago, rewritten for Twitter, right, and as a different writing style, like some phones, like yeah, you just copy and pasted? It's like, no, no, that would be terrible, right? It's much more the things, you're trying to make whole points in one to two tweets in the thread. And usually, if a thread is bombing, you know, in those terrible, it's because someone didn't like rewrite it for the medium. But the second thing is you have to have a group of friends, who you're all trying to grow your Twitter audience together, and you all promote each other's stuff. Everyone that you've seen grow like crazy on Twitter has this group behind them in not everyone, most people you've seen do it quickly. And what they do, sometimes they retweet, but most often they're just replying. Because in the algorithm, ranking, Twitter has gotten way better for discovery, like over the last two, three years. Totally. So a quote tweet is the most like the biggest endorsement if I quote, tweet, something you have, Twitter's going to give that the most credit the algorithm. A retweet is a decent amount below that. Like just a, you know, retweet without comment is quite a bit below. And then basically, right below the retweet without comment, or right with it, is the reply. So you don't get like, if we're having like a, if we put in our mastermind group, five to 10 of us, we're all going to grow our Twitter following. It's not that okay, I now need to retweet everything that Jay says it's that I just need to reply to Jays best threads. And I need, you know, in this case, you need 10 other people to do that. And the algorithm will feed that really, really quickly. And you'll get so much more momentum. And it's not the same level of endorsement because they're not like, I'm not gonna follow Nathan, because all he does is retweet Jays thread, just like now we're friends on Twitter, and we're interacting. Huge,

 

Jay Clouse  42:34

huge insight. Do these people often have their own like back channel communication where they say I just posted this, please go reply. Because I mentioned there's like a time function as well. Yeah, the

 

Nathan Barry  42:44

the general idea is replies within the first 10 minutes, it doesn't really matter. But just set up notifications for everyone, you know, that you're doing this with? So that you get pinged when they reply, or have a WhatsApp group or a text thread. I don't have an official group like that. But I have like, five or six people when I know, like, Okay, this is good. I just put two or three hours into writing this thread. Because during the days, you're like a thread, how long could that take to write? That's what I always tell myself. And then I'm like, Okay, this thing I thought would take 30 minutes took me three hours, but I'm proud of it. So here we go. And the important thing is right, you hit publish on that. And then you text five people and say, Okay, I dropped it, we give it a reply.

 

Jay Clouse  43:26

That's so good. I made a joke earlier, where I was like, I want to append every thread with that gif of Jeb Bush saying Please clap.

 

Nathan Barry  43:37

Yes. 100%.

 

Jay Clouse  43:39

As much as I want to talk about the podcast, I feel like I would do a better service to listeners to do some some crystal balling here, you know, what types of things are you seeing as up and coming trends that maybe people haven't picked up on yet that creators are doing or that you predict might happen through 2022?

 

Nathan Barry  43:58

Oh, that's interesting. Okay, so one trend that I think everyone is seeing, but maybe not, is that monetization is like direct monetization is getting so much easier. So all the platforms that were before saying, We'll give you the platform for free, but all the money is ours. You know, that would be the Facebook, Instagrams of the world, then you have some like the YouTubes, where they're like, Okay, we'll share some of the money with you, you know, here's your cut of the AdSense revenue, so long as you go within these, these tight bounds. Now all these platforms are going to say like, we're going to give you a way to monetize directly so Instagram is rolling out subscriptions. Tick tock is playing with that as well. You know, Twitter has super follows right, they're all going to have this method you know of collecting revenue right converted 18 months ago launch ConvertKit commerce, same thing, right. All the all these platforms will go for a way for you to earn money directly from your fans. The second thing in that is that, it's going to get even more distracting. So what happens is you're gonna have a creator, I was browsing Twitter the other day, like I was fine with on my phone, right and it pops up is like, Hey, do you want to launch super follows. And then you could make, I think it said I could make $2,000 a month with their little calculation, there's a cool little interaction in the app, you know, if you got X percentage to pay you $5 a month. And I think the creators who are going to thrive, are the ones who take one of these opportunities, like they sell, okay, I'm gonna sell a course, or I'm gonna, you know, start a paid newsletter through through ConvertKit, or one of these things, I'm going to go all the way in on Super followers on Twitter, and they launched that and they really promote it, they stick with it. And the creators that are gonna, like stumble, are the ones who are saying, like, Okay, I've got super followers on Twitter, and then I've got these new subscriptions going on Instagram, and then don't forget to buy my ebook through ConvertKit commerce, you know, and then oh, don't forget, I have a community on circle, you know, or discord, or whatever. And they're splitting it between a bunch of things. So I like to think about it in terms of, do you want to build a strip mall, or a skyscraper, and a lot of creators want to build strip malls. And what I mean by that, is that you get 5000 subscribers on an email list, you know, okay, let me sell them this. And a certain number of people buy that. Okay, let me add this other thing. And a certain number of people buy that. Okay, now, let me add this third thing. You have all of these different properties built out on your real estate, and it's like, look, you're earning a great living. You know, we're now at 50,000 $100,000 A year from that. But it's all spread. An example of someone building a skyscraper, and I quote them a lot. But is James clear, where for years, he was like, I'm not going to monetize my email list. I don't care about making money from it, is just how do I keep writing content and buildings, build the biggest possible list, you know, guest posting everywhere, republishing content, pulling it all in, you know, the most people here, he got to the point was like, Okay, I didn't make some money for this. And so once a quarter, like his only monetization is once a quarter, he would teach a habits workshop. And he would promote that teach the workshop, I think the first one made $20,000, which was quite a lot. And by the time we stopped doing them, they're making like $200,000 A piece. But that was the only thing he allowed himself to do. Everything else went into building the skyscraper if they email us, taller and taller. And the result is that, you know, he now has an email list of over a million people. His book, atomic habits was the single best selling book on all of Amazon, all categories, you know, everything, like beating out, you know, Stephen King, and good night moon, you know, like, whatever category, atomic habits was number one, you know, selling millions of copies. And that comes from building a skyscraper. And there's not a right answer. It's not like building a skyscraper is better than building the strip mall. But you have to be intentional about which one that you're doing.

 

Jay Clouse  48:04

Yeah, because it changes the decisions you make around that structure, right? Because I would put myself in the category of what got me to being able to be a full time creator was the strip mall approach. Yep. And so now I'm sitting here, and I've afforded myself more choice and more options. And I'm thinking a lot more like, how do I simplify this because I have actually seen this behavior, where in my email footer, I have the, the buy me a coffee, basically a tip jar approach. In the more SKUs, or products that I created, the less I saw people taking advantage of that. And to me, that was a signal of they no longer feel like they, they are getting a deal. And they owe me for what I'm doing. Because I have effectively monetized that group of people. All right. So that's interesting. That's, that's something that I want to think about also, is, it's a good thought experiment of what would the skyscraper version of what I have look like, right? How do I retroactively change that? Because I think I could,

 

Nathan Barry  49:07

and asking yourself two different questions, right? We're recording this at the beginning of the year, it's often a time that a lot of people are reflecting and thinking on on the future. And so if you say, if increasing revenue was the most important thing for me this year, what would I do? And sit down and spend 30 minutes or an hour, like designing that plan? And then you set that aside and say, Okay, if I didn't care about revenue at all, you know, my needs are met, for whatever reason, in this fictional world that we're stepping into, and I only cared about reach. What would I do? And you map out that whole plan, right, because that's the person that James Decker, you only cared about reach, you know, my approach. I cared a lot about revenue, you know, and so I built a lot of things differently. And so then with those two plans drawn up, and there's probably a third one, like what other things could you care about right? You drop a few separate plans, if you're only monetizing for or optimizing for those things, and then just look at it, what are the other paths that you would take? And then you can decide, okay, I'm going to monetize in this way. But I'm really going to go all in on reaching this way. I'm going to simplifying this, because we, we downplay how much these other things that we're doing, you know, the seven ebook that we still have for sale on our site, you know, and these other things that we're actually then we like to lie to ourselves and say that I that doesn't really distract me from it, or that's not taking away from my primary focus. And the truth is, is like, that kind of thing matters. And so get really clear on what you want as a creator, and put the time and effort into making that happen.

 

Jay Clouse  50:47

I want to hear your thoughts on paid newsletters, one because I think they kind of became in vogue over the last couple of years, because it was novel, whose new, not as many people were doing it. Now we've seen some time pass, I'd love to hear what you think the outlook for that is, and whether you think it's a one time payment, like yours is or some sort of recurring.

 

Nathan Barry  51:09

Okay, I have all kinds of thoughts. So one thing that has changed, like we're talking about trends have changed over time, is more and more forms of monetization have become normalized. And paid newsletters is one of those, which is amazing. Paid newsletters are really great for professionals. And so you need to decide two things. One, are you a professional, and in this case, we mean a professional writer, and to like, is this the craft that you want to be good at. So if you see someone like Lenny Rucinski, or Anthony Pompliano, or someone else who's done a paid newsletter, it's just killing it, right? Like incredible growth, they are really good writers. And writing is what they want to do. Someone else has been on my podcast, burn Hobart, he writes a newsletter called the diff. And he's publishing like almost every single day, because this is what he's good at. This is his craft. And so he doesn't view it as he signed up for a treadmill, where he's like, now I have to create something every single week, you know, he's like, Oh, I can do a paid newsletter three times a week, and no problem. Because that's what he's good at. And so I think these like professional journalists, making the move into a greater space of a newsletter makes a ton of sense. But if you feel like, have you having to show up every single week, or multiple times a week with paid content for your audience, is going to be a big burden for you. And that's not something that excites you, then don't do it. Because when you have an audience, you get to choose the job that you want. And so don't go and choose a crappy job for yourself. And I see a lot of people launch that, and then they get three months or six months in, and how what am I going to publish for Monday, I don't know. And it's so much pressure. And then also, some of your best content can go behind a paywall, and it makes it harder to grow. So I would just be really thoughtful about that. I'm not going to launch a paid newsletter in the traditional recurring sense, because I don't need that deadline in my life, I don't need that obligation. Now, what I did do, that I've had a ton of fun with, is write a newsletter, I call it a paid newsletter. But what's different about it is it's automated. It is, you know, set up in ConvertKit. So when you sign up, you get an email every Friday for I think it's like 12 weeks long at this point. And when I feel like writing, I go and add an email to the end of it. You know, and so every once a month, every other, every couple of weeks, I add another email to it, and it gets built out. And the difference is that I charge people $100 One time to get access to this, because then I have no ongoing obligation to them. Like I think that sales page promises eight emails. And now there's actually 12 You know, and soon there'll be 16 or 18, right? Like I set the bar low. And the only reason that I did $100 payment on it is so it's a newsletter about money. And like basically what you should do, as a creator, once you've made a full time living you made $100,000 a year or more like, what should you do with your money? How should you think about it? How should your mindset change, and I wanted to be transparent with all of my finances. So I just wanted to charge enough that it would filter out everyone who's gonna give me a hard time about like, Oh, you're just bragging about how much money you have, or that kind of thing. So really, the $100 was like a barrier to entry. But if the funds the newsletters made, I think $20,000 I donated all of that money to charity water and use your charity. And it's like I get to use my own product and ConvertKit and I just love it.

 

Jay Clouse  54:49

I love that approach. I've been thinking about lifetime payments a lot lately, but it comes up a lot in the context of community. I think it's tough there because of it's not a broadcast relationship. If you want to grow that thing, even if you are donating all of it, you have to get more people in the door constantly. And that can have a degrading effect on a community. But in a broadcast capacity now, say this was like a for profit thing you were doing, you could go to that sales page now and amend that and say, Actually, it's four angles now, and I'm gonna double the price. And only the people who see that are the new subscribers. I think that's great. And

 

Nathan Barry  55:23

It gives you an opportunity to relaunch it too, which is pretty fun, right? You could do a quarterly launch or something, or whatever you're like, Oh, I got really inspired. And I wrote four more emails in it. And I tweaked this one and I rearranged it, you know, and it's better. And so now it's $150. And everyone who buys it this week, gets it at the old price, something like that, right? It gives you the option to relaunch it. And there's not a lot of pressure. I think once people get to the point where they're making a full time living as a creator, and they've done that for a little while. The tendency is like, Okay, I made 100,000 Last year how to make 150, I made 150 out of like 200 200 to 250. You know, they're like, their own AUCTIONEER in their head, like just going higher and higher. And there's a point where you just say, How can I have more fun? What's the project that I want to do that I'm going to charge money for it, because that communicates that I'm demonstrating value to the, you know, to the audience, but I'm just going to have fun. And that was one for me where this was just a fun thing to do, and happen to make 20 grand.

 

Jay Clouse  56:27

I really love this conversation, both in real time, but also in re listening during the edit. Nathan's challenge about building a skyscraper or a strip mall is something that I think about a lot these days. In fact, this conversation was part of the reason that I decided to build my membership, the creative companion club. I did that exercise of wondering what would it look like if I built a skyscraper, and to me, it looked like shutting down some of my other projects and really focusing on the creative companion brand, and building one signature product, I'd really encourage you to do the same exercise for your business. What if you're maximizing for reach? What would you do? What if you're maximizing for revenue? What if you were building a skyscraper? If you want to learn more about Nathan, you can visit his website at Nathan berry.com or learn more about convertkit at convertkit.com. I'm an affiliate for ConvertKit. So I've put my link in the show notes if you want to use that. And once again, I encourage you to subscribe to the Nathan Barry show here in your podcast app. It's a fantastic show, and Nathan talks to some incredible creators. Thanks to Nathan for being on the show. Thank you to Emily Clouse for making the artwork for this episode. Thanks to Nathan Todhunter for mixing the show and Brian Skeel for creating our music. If you like this episode, you can tweet @jayclouse and let me know if you really want to say thank you. Please leave a review on Apple podcasts or Spotify. Thanks for listening and I'll talk to you next week.