Dan Martell - Personal Journey Of a SaaS Founder with Nathan @ ConvertKit.com - Escape Velocity Show #8

00:00:00.000 About 20 months into the company that we realized, oh, we can't just describe our

00:00:04.720 company based on features or problems that we're solving. We have to narrow it

00:00:08.160 down and say, we're email marketing. First, it was for authors. And that ended

00:00:13.880 up not being a good market or not being a good way to describe the market we're

00:00:17.240 going after. But then we changed it to email marketing for professional bloggers.

00:00:20.960 Ignition sequence start, three, two, one.

00:00:34.560 Nathan Berry, how's it going, man?

00:00:36.120 It's going well.

00:00:36.720 Dude, I'm so excited for this conversation.

00:00:39.840 A, look at this.

00:00:41.600 Is this fun?

00:00:42.360 Does everybody see this?

00:00:43.520 You see this?

00:00:44.260 How long ago did you know you were

00:00:45.760 going to be on the cover of SAS Mag?

00:00:48.120 Like a month ago, I think.

00:00:49.200 Dude, this is so cool.

00:00:50.520 Such a stud.

00:00:51.240 Now, the big question, did they send a photographer

00:00:54.180 to your spot, or did they ask you to send in some stock photos?

00:00:58.720 They asked me to send in some photos.

00:00:59.540 No!

00:01:00.200 Oh my gosh, what happened to the world of journalism?

00:01:02.500 It's so bad.

00:01:03.240 I distinctly remember, actually, Jarrett.

00:01:07.160 I met Jarrett because he was hired as a photographer

00:01:10.060 for a magazine to do the shot.

00:01:12.540 Nice.

00:01:13.040 And so this was in 2008, I believe.

00:01:16.800 And so they were still investing in those budgets.

00:01:19.180 So this is, you paid for this photo.

00:01:21.800 They didn't send somebody.

00:01:23.360 That photo is a bit old.

00:01:24.640 I was really trying to give them a photo post beard.

00:01:27.940 Yeah.

00:01:29.000 I acquired the beard to try to look older.

00:01:31.000 I think it looks good on you.

00:01:32.140 But you know.

00:01:32.980 OK, but this is old, so you weren't happy with this.

00:01:35.320 Well, I gave them other photos.

00:01:36.840 And they said no.

00:01:37.540 They chose those photos.

00:01:38.560 Oh, they did.

00:01:39.180 So that's a bit of a commentary, the editorial account.

00:01:41.620 I think Emily is the editor of the magazine.

00:01:43.940 Anyways, $15 million air, our SAS ConvertKit founder,

00:01:48.660 creator, speaker, good dude, honorary Canadian, my words.

00:01:54.540 So I've given you that title.

00:01:57.480 So I want to chat about a lot of things.

00:02:00.320 We've talked many times over the past few years

00:02:02.700 about growth and scale, some of the things you've done.

00:02:05.700 If you had to look at step functions of growth, ConvertKit,

00:02:08.680 in regards to growth, kind of the million to two,

00:02:11.620 trying to get to 10, what's the first thing that comes to mind

00:02:15.340 in regards to the things that you guys did well?

00:02:18.100 Yeah, the first thing we did well was sales.

00:02:20.860 Unpack that.

00:02:22.260 Yeah, so ideally we would have done sales well from the beginning.

00:02:26.060 We really had the first 18 to 24 months of not running the business well.

00:02:34.680 So that's not the growth curve that you want, right?

00:02:37.640 We basically launched and then got up to 2,000 MRR and then slowly bounced around there.

00:02:43.400 And everything kind of changed when we started to dive into direct sales.

00:02:48.100 and selling, you know, by reaching out, having a conversation, rather than I come from the

00:02:52.180 blogging world where let's sell through content, right? Let's... Inbound. Yeah. Inbound, you know,

00:02:57.240 we should make a sales pitch there. A well-written blog post or sales page should make the sale.

00:03:01.980 It doesn't. Like that may work, um, at a lot bigger scale. Uh, but when you're at 2000 and

00:03:07.820 MRR, no one's heard of you. There's no brand. There's, there's no... Outbound. Did it feel

00:03:12.260 icky? Like, is that why you didn't want to do it or just felt... I just didn't know. You didn't

00:03:15.960 know how to do it.

00:03:16.620 Yeah.

00:03:17.200 And so I kind of, well, I guess two things.

00:03:21.060 I didn't know how to do it, and I didn't know how

00:03:22.580 to reach out to people.

00:03:24.000 So in a way that didn't feel intrusive.

00:03:27.640 Intrusive, or even who to reach out to, right?

00:03:30.300 Because there's everyone on the internet.

00:03:31.780 Who do you serve?

00:03:33.160 And so the first move was to really become specific about,

00:03:36.280 are we building email marketing for everyone,

00:03:38.960 email marketing for people like me?

00:03:40.160 How do you label that?

00:03:42.320 And it was about 20 months into the company

00:03:47.000 that we realized, oh, we can't just

00:03:48.840 like describe our company based on features or problems

00:03:51.740 that we're solving.

00:03:52.240 We have to narrow it down and say, we're email marketing.

00:03:56.800 First, it was for authors.

00:03:58.700 And that ended up not being a good market

00:04:00.340 or not being a good way to describe the market

00:04:02.420 we were going after.

00:04:03.700 But then we changed it to email marketing

00:04:05.240 for professional bloggers.

00:04:06.480 Pro bloggers, not just bloggers.

00:04:08.120 Yeah, because I wanted something aspirational in there.

00:04:10.080 Because blogger is already a term that people think,

00:04:12.780 oh, you're a blogger.

00:04:13.500 That's cute.

00:04:14.200 Yeah.

00:04:14.600 You know?

00:04:15.140 It's like, oh, professional.

00:04:16.380 There was a point when entrepreneur was like that.

00:04:17.960 Yeah.

00:04:18.420 Yeah.

00:04:18.720 I believe it.

00:04:19.220 Yeah, yeah, yeah.

00:04:21.080 So with a professional blogger, it's aspirational.

00:04:23.460 Someone who doesn't get it is like,

00:04:24.540 they're professional bloggers.

00:04:26.640 And so there's more curiosity there.

00:04:29.620 And it feels less hobbyist.

00:04:32.180 Was that tough to go niche?

00:04:33.400 Because a lot of companies struggle

00:04:34.820 where they, when they have a product like yours,

00:04:36.440 it can serve so many different markets.

00:04:38.100 They don't want to, you know, you're a 2K MRR.

00:04:40.980 You don't want to turn people away.

00:04:43.280 So I would say that going after a specific niche,

00:04:47.160 it's the easiest advice to give.

00:04:49.120 And it's great advice.

00:04:49.940 I'd given it to people many times myself.

00:04:51.620 I've heard you give it to people, yeah.

00:04:53.280 And it's the hardest advice to take.

00:04:54.820 Because you're like, OK, Dan, you should focus on this niche.

00:04:57.360 This is all that.

00:04:58.140 Oh, for my business, no.

00:04:59.280 It's different.

00:04:59.920 I wouldn't want to turn away customers.

00:05:02.140 It's totally different.

00:05:03.340 And so it took me a long time to actually take the advice.

00:05:07.800 But it ended up working out, because then I could go after,

00:05:10.800 OK, this is specifically who I'm trying to serve.

00:05:13.540 And I can actually list these people out, right?

00:05:15.620 I can start to make lists.

00:05:16.620 So you can create a name list, segment,

00:05:18.680 buy industry, pro bloggers.

00:05:20.960 You can kind of Google top 10 blogs for a specific vertical.

00:05:24.360 Yeah, and you can be really specific.

00:05:26.300 So I would do things like email marketing

00:05:29.040 for professional men's fashion bloggers in New York City.

00:05:34.140 Because there's probably only 30 of them, 50 of them, right?

00:05:37.680 And was there also this understanding

00:05:40.360 that they had a need that might have been underserved?

00:05:43.840 Because nobody, because when I think of bloggers, many,

00:05:47.520 I mean, Tim Ferriss didn't have email marketing on his blog

00:05:50.000 for a long time.

00:05:50.920 I think Ramit Sethi was like, Tim,

00:05:52.920 you've got to let people subscribe, right?

00:05:55.200 Like, there's almost like some of the bloggers

00:05:56.940 didn't do email marketing.

00:05:58.120 Is that something that was part of that decision, or?

00:06:01.940 No, a bunch of them did it.

00:06:04.720 Maybe it wasn't as popular, but people like Ramit

00:06:06.860 and others were popularizing it and saying, hey,

00:06:09.700 you've got to do this.

00:06:11.840 Pat Flynn was doing the same, things like that.

00:06:15.880 But it was really about trying to get to specific people

00:06:18.280 that we could list out.

00:06:19.440 And we didn't pick these industries

00:06:20.700 because of crazy research.

00:06:22.100 And we decided, OK, professional paleo recipe bloggers

00:06:26.120 who are women are the perfect market. 1.00

00:06:28.240 Really, instead, what we did is we looked at, OK,

00:06:30.920 who's using the platform already?

00:06:32.700 Because we had 100 customers or so.

00:06:34.540 So then you can create some case studies and reference.

00:06:36.600 Yeah, and so if you look at, OK, who

00:06:38.440 are the five most successful companies using us,

00:06:42.180 then what happens is, instead of a little circle drawn just

00:06:44.780 around them, what happens if we broadened it a little bit?

00:06:47.400 What if we went out so it included 50 people like them

00:06:50.340 or 30 people like them?

00:06:51.080 So essentially their peers.

00:06:52.360 Yeah, and what's interesting about that

00:06:54.340 is if you don't have any big names to drop, right?

00:06:57.840 Like now, if you're like, who uses ConvertKit?

00:07:00.600 We have Tim Ferriss.

00:07:01.460 We have Arnold Schwarzenegger.

00:07:02.660 We have Tim McGraw.

00:07:03.400 Dude, I did not know that, man.

00:07:04.620 Congrats.

00:07:05.200 Those are huge.

00:07:06.840 But early on, you don't have those names to drop,

00:07:09.160 which is a very useful thing, because people will sit back

00:07:12.660 and be like, well, who uses you?

00:07:13.920 If you throw out a name, they're like, oh, OK,

00:07:15.860 well, if it's good enough for Tim, it's good enough for me.

00:07:17.520 I call those lighthouse counts.

00:07:18.720 They essentially draw people in just by their credibility.

00:07:22.220 Yeah, and so when you don't have that,

00:07:25.520 if you draw that circle really, really small,

00:07:28.760 then what you can do is people will say,

00:07:32.940 you didn't drop a famous name.

00:07:34.480 But they'll be like, oh, I know her.

00:07:37.180 I saw her at the conference three weeks ago.

00:07:38.740 She uses you? 1.00

00:07:39.980 And no one outside of the industry would think about that.

00:07:42.780 But you're like, no, we're just going with paleo recipe blogs.

00:07:45.700 And they all know each other.

00:07:47.600 And so what happened is we got up to about 5,000 in a month.

00:07:51.300 So this is interesting.

00:07:52.140 So this is you don't need to have the name brand people.

00:07:54.520 You just need to be known by their peers in that space.

00:07:59.760 So Pat Flynn knows Amy Porterfield.

00:08:02.060 You can get that connection there.

00:08:03.840 Well, I mean, both of them are very well-known

00:08:05.740 in their own industry, but yeah.

00:08:07.500 So if you went someone smaller by like a factor of 10,

00:08:10.200 then that would be the same idea where it works.

00:08:13.980 Because what you're doing is you're

00:08:16.900 creating this tiny little echo chamber.

00:08:18.820 So for example, not in the fitness space,

00:08:22.820 because that's massive, in a very small corner

00:08:25.600 of the fitness world, functional fitness.

00:08:29.920 They were all doing high-intensity interval training.

00:08:33.700 And I was talking to someone, and she's like,

00:08:35.500 everyone on the entire internet is switching to ConvertKit.

00:08:37.760 That's what it feels like.

00:08:38.460 And I'm like, OK, so over here.

00:08:40.180 In their universe.

00:08:41.040 Over here, I know that we have 5,000 in MRR.

00:08:43.460 So that is objectively not true.

00:08:44.900 Not true, yeah, yeah.

00:08:46.020 But in their world, because they were saying,

00:08:48.120 I switched, this other person switched.

00:08:49.760 Perception is reality.

00:08:50.880 Switched.

00:08:51.600 And then I was talking to this person at the conference.

00:08:53.300 They said they talked to you.

00:08:54.220 They're thinking about it.

00:08:55.240 But what was your ACV at that point?

00:08:56.940 Because I mean, to do outbound at scale,

00:08:59.380 it sounded like you were doing things that maybe

00:09:01.820 weren't profitable.

00:09:02.960 Yeah, exactly.

00:09:03.620 So how did you, what was the process?

00:09:06.120 Were you doing the outbound?

00:09:07.100 Yeah, I was doing all of it.

00:09:08.060 OK, so Nathan's sending the emails.

00:09:11.060 ACV was floating around what?

00:09:13.100 50 bucks a month, 75 a month.

00:09:15.260 Yeah, so annually, 700, 800 bucks.

00:09:19.860 So really, if you had a salesperson doing this

00:09:21.760 and comping them, yeah, it's not going to work.

00:09:23.820 But this helps build the base of MRR,

00:09:27.440 helps you focus, get the customers.

00:09:30.960 And what was the email copy, and what tools did you use?

00:09:36.000 Yeah, so the first thing was building the list.

00:09:38.820 And I do it two different ways.

00:09:40.680 One, we use built with and nerdy data.

00:09:43.680 Yeah, super cool.

00:09:44.720 Scrape the web.

00:09:46.560 What were you looking for?

00:09:48.480 Who's using Aweber?

00:09:49.320 Who's using MailChimp?

00:09:50.080 Perfect.

00:09:50.940 You knew the competitive set.

00:09:52.100 These other tools.

00:09:53.100 I knew which ones were easier to sell against.

00:09:55.140 I knew at the time, we didn't have the feature set

00:09:56.820 to go against Infusionsoft, so I wasn't going to do that yet.

00:10:00.000 And I was like, great, we'll save that for six months from now.

00:10:03.780 And then the other side that I would do

00:10:05.160 would go the industry direction.

00:10:07.200 And so Google searches, top paleo blogs.

00:10:11.520 The other thing is you go start following people on Twitter.

00:10:14.220 And it will give you recommended, if you follow this person,

00:10:17.440 then you're someone like that.

00:10:18.660 Yeah.

00:10:19.880 Sometimes I feel like Twitter lists

00:10:21.600 used to be used more often.

00:10:23.580 Yeah, kind of died.

00:10:25.500 But you go make your own manual lists.

00:10:27.900 And actually, making the manual lists

00:10:29.440 worked better than scraping the web.

00:10:32.140 I found I got a higher conversion rate,

00:10:33.940 I think because you're in that narrow little echo chamber.

00:10:37.940 If you scrape the web, then it's just people who use Aweber.

00:10:41.440 And that's not as targeted.

00:10:43.940 Yeah, you want the industry.

00:10:46.000 Yeah, and then the email, the trick

00:10:47.900 is to send a really short email.

00:10:49.540 The longer the email, the more I know you copied and pasted it.

00:10:53.520 And it's not personal.

00:10:54.560 So I would say like, hey, Melissa, just reaching out.

00:10:58.500 The reason I'm reaching out is I saw that you're using Aweber,

00:11:00.580 and I wanted to know if there's anything in particular

00:11:03.420 frustrating you about Aweber.

00:11:04.740 So you went straight for pain discovery?

00:11:07.520 The reason I ask, I run an email marketing company

00:11:10.500 focused on professional bloggers,

00:11:13.240 and I'm trying to learn how best to improve the product.

00:11:16.280 Ooh, you went for the advice angle.

00:11:17.860 Yeah.

00:11:18.180 Oh, yeah.

00:11:19.280 Ask for advice, get a customer.

00:11:21.360 That's super smart.

00:11:22.260 And that's the whole email, right?

00:11:23.880 It's, what was that, three sentences?

00:11:25.820 We're going to be up to four sentences.

00:11:26.920 And then they at least reply and say,

00:11:28.180 well, I hate this part of the product.

00:11:29.580 Yeah.

00:11:30.100 And so when MailChimp is the most common, obviously,

00:11:33.060 because they're the biggest,

00:11:34.680 when I would email people from that side,

00:11:36.400 they would come back and they'd list out,

00:11:38.260 oh, I can't tag my customers.

00:11:40.500 It's really hard to do a content upgrade or a lead magnet.

00:11:43.920 And from there, it'd be easy to say,

00:11:45.720 well, that's exactly why I started converting,

00:11:48.540 because I used MailChimp.

00:11:49.420 And I had those exact problems,

00:11:51.200 because everyone had the exact same problems.

00:11:53.800 As far as customer research,

00:11:55.720 sometimes I would learn new things,

00:11:57.140 But really, it was the same five things over and over again.

00:12:00.440 And so then I'd try to go from there to a call.

00:12:02.780 You know, hey, let's talk through it.

00:12:04.060 Happy to show you some workarounds for how to pull off some of that in MailChimp if you want.

00:12:07.840 Yeah.

00:12:08.200 But also, I'd love to show you what I'm building because it's designed for this exact need.

00:12:13.180 And you ran like a product demo or was it just like an ad hoc call?

00:12:17.260 Did you have a structure to it?

00:12:19.180 Yeah, it was a product demo.

00:12:20.400 Yeah.

00:12:21.320 And then asking them more of their process and workflow.

00:12:24.440 And how long did it take you to get to a point

00:12:28.460 where somebody else could do that for you, the outbound?

00:12:32.800 Or was it always Nathan?

00:12:34.060 It was me for a long time.

00:12:35.720 OK.

00:12:36.160 And when you hired somebody, did you

00:12:37.520 still do the initial outreach as Nathan, or did they do it?

00:12:40.680 They did it as themselves.

00:12:41.580 OK.

00:12:42.820 Though as we started to hire people,

00:12:44.680 like sales is one of the last roles that I hired for,

00:12:49.120 we had a lot more inbound coming later on.

00:12:52.680 This isn't something that we necessarily did in a scalable way

00:12:56.520 as someone pretending to be me or anything like that.

00:13:02.440 But one thing on the demo, I think

00:13:05.340 people spend too much time talking themselves.

00:13:07.900 And if you could record a demo and then even just make note

00:13:12.000 of how much time did they spend talking versus you spent talking.

00:13:15.060 That's it, that one data point.

00:13:16.620 I think it's so important because if it's like 80% you talking,

00:13:21.920 then your message is not being received.

00:13:24.560 I think one of the most effective things

00:13:26.480 is for you to ask a question, and then them talk for a while

00:13:30.800 and talk themselves into using your product.

00:13:33.320 Because that's usually where it comes to on the frustration

00:13:35.480 side.

00:13:36.240 And so you did that for a while.

00:13:37.720 So is that something you guys still do today, or that's kind of?

00:13:40.320 We don't really do as much outbound in that way.

00:13:43.400 Most of the outbound that we do is

00:13:44.640 to try to get these massive top tier accounts.

00:13:47.680 And that's a lot of more account-based marketing.

00:13:49.700 Go hop on a plane, host a dinner in LA, go to a conference.

00:13:53.300 Invite these influencers.

00:13:54.620 Yeah.

00:13:55.200 Yeah, so still part of the strategy.

00:13:56.600 So that got you from the 2K to 20, I'm assuming, 25K MRR

00:14:02.120 and onward.

00:14:03.020 Yep.

00:14:03.480 So there's two important things there.

00:14:07.320 One is that the demo process was actually

00:14:11.480 terribly ineffective.

00:14:13.220 Because we'd get on this call, talk through it,

00:14:15.760 they'd be like, oh, this makes sense.

00:14:17.700 And then there'd be this moment where they'd pause

00:14:19.400 You can tell they're thinking about something, and they're like, yeah, actually, I love what

00:14:24.440 you're doing, but I'm not going to switch.

00:14:26.580 It's too difficult.

00:14:28.740 And in sales and in life, if you ask me to do something, hey, will you buy this product?

00:14:37.400 Will you whatever else?

00:14:39.500 I have to give you an answer.

00:14:40.960 I'm socially obligated to give you an answer.

00:14:43.060 If you're trying to sell to me through a website or a video or whatever else, I just hit the

00:14:47.840 back button.

00:14:48.260 Yeah.

00:14:48.580 But I can't do the in-person equivalent of backing away slowly

00:14:52.140 and getting up and leaving.

00:14:54.080 I have to answer.

00:14:55.400 And if I answer, I can't just say, no, Dan, I'm not going to do that.

00:14:59.680 I have to give a reason.

00:15:01.520 And so people would pick the reason of switching costs.

00:15:04.540 And I like to imagine someone like if that's the reason,

00:15:09.640 and that's the door, and they're leaning up against it,

00:15:11.940 and they're like, oh, so you can't go through.

00:15:14.240 And so all the possible objections, they pick that,

00:15:17.480 and that's what it's stacking up against and so if you take that away they like kind of just fall

00:15:21.760 through the door and they're like they don't have a choice but to uh but to sign up and so what i

00:15:26.760 would do is well first i try to say oh it's not that much work blah blah not compelling at all

00:15:31.860 yeah what was compelling is saying i'll do it for you for free wow and so here you have a

00:15:38.500 50 a month account and i'm like okay i'll take up like give me your wordpress login give me your

00:15:43.860 MailChimp login, let me export all your subscribers,

00:15:46.320 let me recreate all your forms to match the look on your site.

00:15:49.440 Did you analyze their account before you offered that

00:15:51.720 to make sure?

00:15:52.260 No, just.

00:15:53.400 No, because, OK, let's go back for a second

00:15:56.300 to the idea of word of mouth.

00:15:58.560 If you ask, I don't know, making something up,

00:16:01.620 50%, 80% of founders, how did you go, oh, word of mouth,

00:16:04.260 great word of mouth.

00:16:05.820 And as a founder, you're like, oh, that makes sense.

00:16:07.920 Like, great, I'll just go through,

00:16:09.420 grow through word of mouth.

00:16:11.020 You're like, wait, that is the most frustrating advice

00:16:13.820 to ever hear, because what do you do with that?

00:16:15.200 Yeah, what is word of mouth?

00:16:16.260 You don't even have any customers who can talk about you,

00:16:20.140 who can share to tell other people.

00:16:23.500 And so when you're doing $1,000 a month,

00:16:26.060 that is the most obnoxious advice to hear.

00:16:28.960 But what you realize is that's where

00:16:31.320 you have to put this level of sales and hustle,

00:16:34.120 and basically do anything possible

00:16:35.580 to get the right customer, because then you'll

00:16:38.160 start to get that momentum.

00:16:39.980 And so it's almost an offering that you created something

00:16:43.100 that they went like, wow, that's amazing that he would do that.

00:16:46.700 And they talk about it, because it's almost

00:16:50.660 like ridiculous that they're like, man, for $50 a month,

00:16:54.140 you really like, I wouldn't do that. 0.52

00:16:55.760 Because that's what I'm thinking to myself.

00:16:57.220 And you're like, oh, I'll just switch you,

00:16:58.460 and we'll take care of it.

00:16:59.360 I'm like, you can't be making money.

00:17:01.860 Right.

00:17:02.360 And that's the thing is that you don't have to make money.

00:17:04.440 Because we're working towards MRR, MRR compounds.

00:17:07.340 We're working towards word of mouth

00:17:08.820 and word of mouth compounds.

00:17:10.280 So you have both of those factors.

00:17:12.080 And this is horribly unprofitable until 10,000 MRR,

00:17:16.800 20,000 MRR, somewhere in there.

00:17:18.920 But unless you have a big audience coming in

00:17:22.100 or some other partnership, you're

00:17:24.340 not going to get to 20,000 MRR without something like this.

00:17:28.460 Got it.

00:17:30.400 Your 10% monthly growth on $500 of MRR,

00:17:33.260 it's not going to get anywhere.

00:17:34.260 How many accounts do you think you guys got

00:17:36.280 because of that strategy, the outbound?

00:17:38.660 At least 300, 400.

00:17:40.080 So 300, and then I know we've talked a lot

00:17:42.900 about affiliates, partners, the long tail distribution

00:17:47.080 of that.

00:17:48.600 How did you ramp that up meaningfully

00:17:51.220 and unpack that strategy?

00:17:52.680 Yeah, so that was the next phase.

00:17:55.340 So we got to about 20,000 in MRR.

00:18:00.240 So say in December 2014, we were at 2,000 a month.

00:18:06.280 Six months later, we're at maybe 7,000 a month

00:18:09.040 by that September.

00:18:10.160 So nine, 10 months later, we're at $20,000, $22,000 a month.

00:18:16.660 And that's where we're actually starting

00:18:18.280 to notice that word of mouth is coming in.

00:18:21.000 Every sale that we make is making the next sale easier.

00:18:25.480 And it might be 1% easier, but you notice that.

00:18:28.800 Like, oh, that wasn't as hard as it used to be.

00:18:33.200 The other thing is being in the blogger space.

00:18:36.360 The nice thing about it is if we go to the Chamber of Commerce

00:18:41.080 or something like that, and I saw a couple people

00:18:45.440 on Bing customers, and they're really happy,

00:18:47.500 they might tell two or three of their friends

00:18:50.140 in the general small business space.

00:18:52.120 In blogging, if Pat Flynn's happy,

00:18:54.140 he's going to tell 10,000 of his closest friends.

00:18:57.000 And there's momentum there.

00:18:58.220 Like, oh, that's interesting.

00:19:01.640 And so a few big blogs signed up.

00:19:03.620 And again, that wasn't strategic thinking at the beginning,

00:19:07.060 which is fascinating.

00:19:08.000 Because it's like, sometimes I feel like, in hindsight,

00:19:10.520 it's easy for us to be like, oh, I

00:19:11.820 did it because of these reasons, success theater.

00:19:15.200 But in reality, it was literally sometimes it's just luck.

00:19:18.800 Yeah, we didn't pick that.

00:19:20.220 Yeah, you didn't like, OK, here's the 15 niches.

00:19:22.080 We'll pick this one, because they have an audience

00:19:23.740 and they have a propensity for sharing.

00:19:26.700 But it turned out to be an awesome thing.

00:19:28.400 Yeah, it ended up working out really well.

00:19:31.920 And so we had these two accounts that signed up

00:19:34.260 when we were about 10,000, 12,000 MRR.

00:19:36.480 So it was Pat Flynn.

00:19:37.660 And he wasn't going to talk about it,

00:19:39.480 but he was trying it out and seeing how this works.

00:19:42.840 And then the other one was a blog called Wellness Mama,

00:19:46.200 which when I first met them, we were at a conference.

00:19:49.860 And it was one of those, oh, what's your blog on that?

00:19:51.860 And you're like, oh, that's cute.

00:19:53.980 It said Wellness Mama.

00:19:55.440 I was like, oh, let me type it in.

00:19:56.380 And so I typed it into Google, and I typed Wellness.

00:19:58.980 And it auto-completed to Wellness Mama.

00:20:01.800 And the last company I worked for was in the health insurance

00:20:05.960 and hospitals, wellness, all that.

00:20:07.440 And I knew how much they cared about the term wellness.

00:20:09.440 And I was like, OK, this must be a big blog.

00:20:12.580 Yeah, for Google to do an auto-suggest on the term wellness.

00:20:17.160 Yeah, you'd never been to anything similar.

00:20:18.940 It was just like.

00:20:20.280 So we got them and we got Pat actually on the same day.

00:20:23.860 So that was a very nice.

00:20:25.220 We went from 10,000 in MRR to 15,000 in MRR in a single day

00:20:29.060 because them and another account signed up at the same time.

00:20:32.700 But then by September, October, they were onboarded,

00:20:35.860 things were going well, and they started to talk about it.

00:20:38.540 And that's when all of this kicked off.

00:20:40.880 And we were at 20,000, and then we jumped.

00:20:47.820 I think we grew like 60%.

00:20:48.720 Did you guys formalize that conversation with them?

00:20:51.080 Is that how the partnership or affiliate program started?

00:20:53.960 That's right when we started to launch the affiliate program.

00:20:56.120 So those first accounts, Pat started,

00:20:59.060 he would go live on Periscope at like weird times.

00:21:02.940 Like he did it once at 1 in the morning,

00:21:04.400 I think the first time that he did it.

00:21:06.140 And we got like six people that signed up just from that.

00:21:09.320 And from him doing a short live Periscope

00:21:11.220 at 1 in the morning, and all these people were like,

00:21:12.620 wait, what are you using?

00:21:13.400 What's this new tool?

00:21:16.180 And then we're like, OK, let's make

00:21:17.800 an official affiliate program and kind of go from there.

00:21:21.540 And then people started sharing a lot.

00:21:26.560 And so what was the original conversation

00:21:29.220 with a Pat or a Wellness Mama blog to become an affiliate?

00:21:33.040 Like, obviously, they got to use the product.

00:21:35.300 They got to love it.

00:21:35.940 But was there a different rev share with them?

00:21:39.400 Was there an understanding of a marketing calendar?

00:21:42.380 Kind of like, what was the early days

00:21:43.560 versus what does it look like today?

00:21:45.320 Yeah, the early days, it was very informal.

00:21:48.960 It's always been the same rev share.

00:21:50.780 I've always taken the approach, because I'm

00:21:52.820 transparent with every number in business.

00:21:54.840 Yeah, people didn't know this.

00:21:56.300 You put all your financial numbers publicly

00:21:58.180 on the internet.

00:21:58.820 Bear Metrics, ConvertKit, search it.

00:22:00.560 You can see everything.

00:22:01.420 It's pretty crazy.

00:22:02.660 Yeah, and I never wanted to make a deal where

00:22:07.220 I was giving somebody a free account,

00:22:09.180 there's any of these other things.

00:22:11.400 Like, you have a 20% commission, but you get 30% or anything like

00:22:14.820 that.

00:22:15.320 OK, so your idea is that if somebody saw what everybody

00:22:17.440 paid publicly, you'd feel good about it,

00:22:19.960 because it didn't show any.

00:22:21.500 Yeah, because it doesn't show favoritism.

00:22:24.740 And quite honestly, bloggers are used to getting stuff for free.

00:22:27.860 Hey, I'll do this.

00:22:29.120 I'll talk about it.

00:22:30.340 Well, if my whole market is bloggers,

00:22:31.800 then I can't really do that.

00:22:34.060 I mean, you don't want to have the conversation like, well,

00:22:36.020 you're actually not a famous enough blogger.

00:22:37.440 Yeah, nobody knows you enough.

00:22:39.160 That doesn't go over well.

00:22:40.480 Yeah, they don't like that at all.

00:22:43.320 So as we kicked out this affiliate program,

00:22:45.560 we did a 30% recurring commission.

00:22:48.800 Actually, the reason we picked that number

00:22:51.360 was because that's what Aweber did. 1.00

00:22:53.480 And so it was just like, great, let's do that.

00:22:55.420 And Aweber, it's kind of odd to think about it now.

00:22:57.300 Aweber was the biggest competition.

00:22:59.760 Like MailChimp's way bigger, but the most direct competition.

00:23:03.140 Yeah, the one that the bloggers were using.

00:23:04.980 Yeah.

00:23:05.480 Because it was, for the most part,

00:23:06.420 were they free in the early days?

00:23:08.420 I don't think Aweber ever had a free.

00:23:09.440 They never were free, eh?

00:23:10.640 But they were definitely cheaper.

00:23:12.260 Yeah, and I'd come across people who

00:23:15.280 had a grandfathered account from 12 years ago.

00:23:17.540 And I was like, $9 a month, $19 a month.

00:23:19.760 Compete on that price.

00:23:20.660 Yeah, it's like, yeah, you could stay with AWeber.

00:23:22.680 We'll never.

00:23:23.220 Yeah.

00:23:23.780 But then sometimes people would come back like six months

00:23:25.580 later and be like, have you more of my friends switched

00:23:27.440 and make enough money from email that I'm

00:23:29.660 going to give up my grandfather price with AWeber

00:23:31.520 and come over.

00:23:32.780 That's awesome.

00:23:33.780 But we closed out that year on the principles of direct sales

00:23:38.860 and then going into affiliates.

00:23:40.360 We closed out that year at $98,000 in MRO.

00:23:42.800 So we went from $2,000.

00:23:43.880 Cracked the millionaire level.

00:23:45.560 Yeah.

00:23:47.060 So you went from $2,000 to $90,000 in one year.

00:23:49.760 Yeah.

00:23:50.300 Jeez, that's some great growth.

00:23:53.180 You were Inc. 500 this year.

00:23:54.940 What number were you?

00:23:56.240 Inc. 500, yeah.

00:23:57.140 70, 72, 73.

00:23:59.240 And like one of the top in software?

00:24:01.500 Yeah, we were number eight in all of software.

00:24:03.380 That's great, man.

00:24:03.980 Number one in Idaho.

00:24:05.300 Yeah, I love that one.

00:24:06.380 You would think that that's not a competitive market.

00:24:09.200 Yeah.

00:24:09.660 It's absurdly competitive, because ClickFunnels

00:24:11.540 is in our space, and they grew.

00:24:14.420 They had a higher revenue than we did.

00:24:16.100 we had a lower starting point.

00:24:17.340 It's all about percent growth.

00:24:19.880 It's like, how low can I start and how fast can I amplify?

00:24:23.420 Yeah, let's sandbag a little bit up front,

00:24:25.280 just ready to let the floodgates go.

00:24:27.560 We need to make the list.

00:24:29.200 But affiliates for you, that began it.

00:24:32.080 But really, I feel like, I think one time

00:24:34.220 you said it was a third of your marketing channel.

00:24:36.860 And probably still is today.

00:24:38.100 And one of the things that I loved,

00:24:40.020 A, you're an incredible operator and thoughtful about team

00:24:42.780 and structure more than just like,

00:24:44.280 I think a lot of people get in software

00:24:45.500 and they want to raise a bunch of money.

00:24:46.880 And it's almost like they want to play entrepreneur

00:24:48.440 more than they actually want to build a great product

00:24:50.220 or build a great team.

00:24:52.220 And that's one thing that I saw.

00:24:54.080 And I remember meeting the gal you

00:24:56.120 had hired to essentially backfill the partner program,

00:24:59.060 meaning that you assigned a person to own it, to run it,

00:25:03.140 to fly out.

00:25:04.080 And that was one thing that I always thought was really smart

00:25:07.500 was that you invest in her going to meeting face to face,

00:25:12.980 I don't know, twice a year, once a year,

00:25:14.600 with your top partners to have conversations.

00:25:17.800 And you were telling me most of their other affiliates,

00:25:20.580 they've never met anybody at the company that they promote.

00:25:23.460 So how does it look like today in regards

00:25:26.920 to how you've operationalized it, how you look at it

00:25:29.840 as a channel?

00:25:31.340 Yes, we hired someone on our team.

00:25:32.560 Her name is Alexis.

00:25:34.500 She came on pretty young and relatively inexperienced.

00:25:39.060 But it was one of those things where the way I met her

00:25:41.760 at a conference and the way she connected with people

00:25:44.140 and all that, I was like, OK, there's something here.

00:25:46.780 She didn't have a reputation or things like that. 1.00

00:25:48.900 So if she emailed somebody cold, they

00:25:51.260 may not have taken it.

00:25:52.520 But that's where I realized, oh, I can invest in her brand

00:25:55.880 and build that up.

00:25:57.360 And I've done that as well with Isa,

00:26:00.300 who we have teach our webinars of the same sort of thing,

00:26:02.780 where very deliberately, you don't want anyone

00:26:06.380 to feel like I was going to have Nathan teach the webinar,

00:26:08.940 or Nathan was going to be the one to fly out,

00:26:10.760 but then I got dumped off on somebody else.

00:26:13.000 So I'm actually very deliberate about building

00:26:15.000 the brands of the people on my team.

00:26:17.300 So it's not an accident that when

00:26:21.220 Issa teaches a webinar with Pat Flynn,

00:26:23.620 there's photos on Instagram of them hanging out

00:26:25.580 and that kind of thing.

00:26:26.420 So then when the next person is like, oh.

00:26:28.340 Oh, so that's interesting.

00:26:29.380 So you actually, the flying people out there

00:26:32.100 is to actually build the relationship with that person

00:26:34.500 and the influencer.

00:26:35.440 And the brand of.

00:26:36.680 Of the person.

00:26:37.340 Because I want someone taking the meeting from Alexis

00:26:40.080 and being like, oh, I saw on Instagram.

00:26:42.240 Pat just posted, I saw you guys were hanging out last week.

00:26:45.440 Melissa Griffin, I saw she posted about how Alexis came out

00:26:49.940 and spent a day just helping her redesign all of her funnels

00:26:53.160 and plan her content calendar and stuff like that.

00:26:56.460 That's amazing.

00:26:56.820 So it's a level of investment.

00:26:58.860 And I think people, I guess it's a way of investing in employees.

00:27:06.000 Well, it gives you leverage.

00:27:07.400 Yeah, exactly.

00:27:08.360 Because if I can walk in and someone thinks of them

00:27:12.120 as on my level, and I actually think Clay Collins

00:27:15.200 did a good job of this.

00:27:15.760 He did a great job with Tim.

00:27:17.280 Where he would actually say, and the line that he would use

00:27:20.420 is, oh, you don't actually want me to teach the webinar

00:27:22.880 because Tim's webinars convert better than mine.

00:27:24.880 Oh, jeez.

00:27:26.180 As soon as you say that, it's like, no,

00:27:27.860 I want the lower converting one with you.

00:27:31.120 It's like, thank you for, yeah, that's brilliant.

00:27:33.920 So you have to do that, right?

00:27:35.040 Because if you build a brand based on a personality,

00:27:38.340 then that's going to stop working.

00:27:41.860 Like, it won't scale.

00:27:43.520 And so just have a system for, I guess

00:27:47.280 this would be Laura Roder's term, 0.68

00:27:48.400 have a system for creating fame for your team members.

00:27:51.800 And so you got one strategy that was, well,

00:27:54.600 I mean, it sounds like the same part of the same thing

00:27:56.420 is you had people that are affiliates that are essentially

00:27:58.860 just promoting you, but then you also did the webinar.

00:28:01.820 How, like, was that part of being a certain level

00:28:05.940 of partner, where there was an agreement

00:28:07.380 that there was a webinar that they promoted to their list.

00:28:10.260 You, I believe, did the same webinar for each partner,

00:28:13.680 because you knew that it added a ton of value,

00:28:15.440 and that obviously it converted well.

00:28:17.400 How did you promote that?

00:28:19.380 So obviously affiliates link on their website, blah, blah,

00:28:23.160 blah, that's cool.

00:28:23.940 But doing the webinar, it's a bigger ask.

00:28:26.140 They're going to promote it to their list.

00:28:27.780 How did you kind of build up that program?

00:28:29.780 Did you do a bunch of the first webinars

00:28:31.360 and then transition it over?

00:28:33.180 Yeah, so the first problem that you have running an affiliate

00:28:35.220 program, there's kind of two.

00:28:36.620 One, if you just open it up, then whoever shows up.

00:28:38.660 Yeah, like a ClickBank.

00:28:39.860 That, to me, is affiliate.

00:28:40.900 The other one, when somebody's, that's partner.

00:28:43.260 That's like, hey, we're going to agree to coexist

00:28:46.780 and promote each other.

00:28:47.700 Like, there's a.

00:28:48.900 Right, because the first people you get in the door, 1.00

00:28:50.760 they're useless. 0.96

00:28:52.800 I remember Chris Guillebeau told me once, he was like, 0.99

00:28:56.760 do you know the 80-20 rule?

00:28:57.800 And I was like, yeah.

00:28:58.800 He said, in affiliates, it's a 98-2 rule.

00:29:01.800 And you would think it's like, oh, 98%.

00:29:03.360 It can't be that much.

00:29:04.300 He's like, 98% comes from 2%, or 2% of the people. 0.96

00:29:10.020 I was like, that?

00:29:10.640 And he goes, no, no, no.

00:29:11.900 The 98.2 rule with affiliates is that only 2% of your affiliates

00:29:15.800 will ever make a single sale.

00:29:17.320 Anything.

00:29:18.740 Because all these people sign up, oh, I'm going to do this.

00:29:21.220 Drop a link on a website.

00:29:22.800 And it never works.

00:29:23.540 So you actually have to apply direct sales,

00:29:26.280 like the first lesson we learned in the business, to affiliates.

00:29:29.660 Oh, got it.

00:29:30.700 Because then if you're really proactive,

00:29:32.900 then you go get those dream partners

00:29:35.540 and put in that level of work.

00:29:38.000 And now you're immediately going to run into the next problem,

00:29:40.700 which is in SaaS, if people can buy at any time,

00:29:44.940 they'll put it off basically forever.

00:29:46.400 Yeah, why would they do it on the webinar?

00:29:48.220 There's no urgency.

00:29:49.680 And so webinars are interesting because they

00:29:52.460 create an event where now there's

00:29:54.900 a reason for Pat or Melissa or whoever

00:29:58.220 to promote ConvertKit now instead of just a link

00:30:02.080 on a resources page, and email their list,

00:30:04.280 and bring people to it.

00:30:05.640 Then it also gives us the opportunity

00:30:06.960 to put urgency on the back end of sign up live on the webinar,

00:30:11.420 or sign up within 48 hours.

00:30:13.000 Yeah, add some extra add-ons, or scarcity.

00:30:15.260 You know, get this free course as well.

00:30:17.760 And what's your offer today that works really well?

00:30:21.920 Yeah, so our offer today is a free trial.

00:30:24.440 So right now, you go direct.

00:30:25.920 You don't get a free trial.

00:30:27.020 Well, so you do.

00:30:28.000 You get a 14-day free trial.

00:30:29.580 Now you get a 30-day.

00:30:31.120 So on the webinar, you get a 30-day free trial

00:30:33.400 and additional bonuses.

00:30:34.620 And what are those?

00:30:36.360 We have two courses, and then-

00:30:38.320 What are the courses?

00:30:39.340 A Facebook course or this building?

00:30:41.860 One is a book that I wrote called Authority.

00:30:43.640 Yeah, that's how you got into this whole thing.

00:30:45.760 Right.

00:30:46.060 Yeah, super cool.

00:30:47.160 And so that one's done really well,

00:30:49.600 and a lot of people have built brands on that one.

00:30:51.400 So it has a good reputation.

00:30:52.900 Yeah.

00:30:54.400 And it's sold for like $100, and so being able to throw that in.

00:30:56.260 For real value.

00:30:57.040 Yeah.

00:30:58.980 And then, you know what?

00:31:01.200 So it's interesting.

00:31:02.100 Now I'm trying to think about what the offers are.

00:31:04.260 And this is a little bit of a commentary for me

00:31:06.660 on the business.

00:31:07.560 I don't actually know.

00:31:08.580 But I mean, I'm like separate from that.

00:31:10.500 No, no, I mean, that's, I think it's

00:31:12.740 a compliment to you as a leader.

00:31:14.140 I mean, I think sometimes people think

00:31:15.660 you're supposed to know everything.

00:31:16.660 And for me, I have incredible people that support me.

00:31:20.960 And I think if anybody got to see behind the scenes, 1.00

00:31:23.300 they'd go like, man, Dan is either dumb or lazy. 0.99

00:31:25.960 Because I mean, that's just, but I 0.99

00:31:28.220 So I think that's what leaders are supposed to do,

00:31:30.920 is really just empower people to make decisions and guide them.

00:31:33.500 So the fact that you don't know the offer doesn't matter.

00:31:35.400 I'm sure you know that they're converting,

00:31:37.360 which is the primary metric.

00:31:38.940 Yeah, the number of trials.

00:31:40.360 Yeah, I'm going to measure the outcome,

00:31:41.880 not necessarily the tactic, because that's

00:31:43.760 independent of them achieving goals and for the business.

00:31:47.280 But I'm just curious, because I think a lot of SaaS founders

00:31:51.000 want to do a webinar.

00:31:52.580 They don't know how to sell from a stage, a digital stage

00:31:55.660 or physical stage.

00:31:56.960 And I think what you've done, and I reference you guys

00:32:01.200 all the time for webinars, you and Clay and a few others,

00:32:03.600 is you ask yourself, well, what does the client need

00:32:06.440 to be uber successful?

00:32:08.280 They're going to buy our product.

00:32:09.240 They're going to use our software.

00:32:10.560 If we had to move up a level and say, what tool,

00:32:13.920 what information, and even other tools.

00:32:17.680 I think it was on Leadpages or others.

00:32:19.320 They offered like, no, it was Lewis Howes.

00:32:21.960 It was like a 90 days WebEx, because he was teaching webinars.

00:32:25.120 So it's like, if you don't have a webinar tool,

00:32:27.540 I'll get you 90 days for free.

00:32:29.340 So it's even just thinking about,

00:32:30.620 how do I package things that are going to help my customer

00:32:34.220 be more successful?

00:32:36.300 Templates, that kind of stuff.

00:32:38.040 Maybe this before when you were doing the converting people,

00:32:41.500 that would have been an incredible thing to add to the offer

00:32:43.880 because people would definitely want this.

00:32:46.520 It's like, he's never going to make any money with this,

00:32:48.000 but let's do it now.

00:32:50.400 So that's cool.

00:32:50.920 So the webinars with certain partners

00:32:53.300 and use a direct sales process to essentially reach out,

00:32:56.580 build a relationship, invest in having somebody fly over,

00:33:00.240 connect with them, add value, which is cool.

00:33:02.120 I never even thought of that because they're

00:33:03.620 connecting with all the different other partners.

00:33:05.480 So they're seeing patterns.

00:33:06.980 So they can actually provide a consultative sale and a value

00:33:10.620 add.

00:33:11.960 Well, and the other thing is they approach it

00:33:13.900 from a year-long perspective.

00:33:16.400 How should we work together in 2019, in 2020?

00:33:19.820 What's your content calendar?

00:33:20.980 Oh, you don't have a content calendar?

00:33:22.820 OK, all right, forget ConvertKit for a second.

00:33:24.740 What if we sat down and made a content calendar

00:33:26.480 for your business right now?

00:33:27.700 And you can ask questions and all of that,

00:33:30.200 and then help the affiliate shape that.

00:33:31.820 Because they've been thinking about it from all the big people

00:33:35.180 have thought through this.

00:33:36.180 But that mid-tier, who have 50,000 people on their email list,

00:33:39.640 a lot of great fans, they're still a little bit

00:33:42.260 on the treadmill and a little too down.

00:33:43.940 Yeah, they're not proactive yearly scheduling.

00:33:46.200 They're just like, yeah.

00:33:47.360 And so then if you, like this is what Alexis does so well,

00:33:51.080 is she comes in and says, OK, let's look at it from a year-long perspective.

00:33:55.600 What's the problem here?

00:33:56.780 When do you want to launch your course?

00:33:57.740 When do you want to do this other thing?

00:33:59.480 And she's very upfront about, great, and let's promote ConvertKit here, there, and down here.

00:34:04.360 So essentially, here's the gaps.

00:34:06.120 This is a great time.

00:34:07.000 After you do your course, let's do a ConvertKit.

00:34:09.220 Let's do another one for you, another one for a partner.

00:34:11.680 Yep.

00:34:12.120 Yeah.

00:34:12.340 And so then she works that in, and they walk away and go, whoa, my business is set up.

00:34:18.460 So I have these spots where additional revenue from ConvertKit

00:34:22.500 is going to come in as an affiliate.

00:34:23.940 And do you sell the partners on an EPC

00:34:26.500 or some kind of estimated earnings per click

00:34:29.920 or some kind of revenue?

00:34:30.840 Not really.

00:34:31.400 No, they don't care, or is it like?

00:34:33.720 I think it's one of those things.

00:34:35.700 So what's interesting is they really

00:34:37.260 tend to like the recurring revenue.

00:34:39.420 In the blogger space, it's easy to sell an e-book,

00:34:43.700 things like that.

00:34:44.280 You get your $50,000 spike from a launch.

00:34:47.320 But even $1,000 or $2,000 a month of recurring,

00:34:51.880 that's pretty interesting.

00:34:52.720 And they think of it as, OK, well,

00:34:54.640 with this first little promo, I just

00:34:57.520 want to cancel out my car payment.

00:34:59.260 Now I want to cancel out my house payment.

00:35:02.580 You get to that point.

00:35:03.520 Now I want to buy a new car.

00:35:04.640 Right.

00:35:05.200 And that's the kind of thing where

00:35:08.060 it's actually really compelling.

00:35:09.340 So the numbers tend to be small.

00:35:13.240 Or they're not big enough that you would brag about that.

00:35:17.300 Yeah, because when they're an affiliate

00:35:20.300 for somebody selling a $2,000 product,

00:35:22.640 and they're making 50%, the numbers

00:35:25.140 might be bigger for the same level of effort.

00:35:27.980 But for you, it's the reoccurring.

00:35:30.060 So it may not be up front, but it's saying, hey,

00:35:33.300 the way I say it is you can be in SaaS

00:35:34.740 without having to build SaaS.

00:35:36.940 It's kind of pretty compelling, because if anybody's

00:35:38.520 tried to build a tool or software,

00:35:40.000 they understand there's obviously a lot of friction there.

00:35:43.260 So that brings you, so we start with the direct outbound sales

00:35:46.160 and the partner stuff.

00:35:47.660 What do you guys do today that you feel

00:35:50.280 is kind of moving the needle for you guys at scale?

00:35:55.580 At 15 million ARR, what are you doing to get to 50?

00:36:01.040 Continuing on outbound.

00:36:04.920 We're actually kind of revisiting outbound

00:36:06.620 in a different way.

00:36:08.900 We're doing it in much more of, I guess,

00:36:13.380 with Nike as our model in that sense.

00:36:16.240 We have all these aspirational people.

00:36:19.500 And so Nike is going out and getting these athletes.

00:36:22.440 Athletes are inspiring the individuals, the weekend

00:36:28.440 warrior type.

00:36:30.520 And then those are taking it all the way through

00:36:32.620 to the general population.

00:36:34.000 So they build a brand in that way.

00:36:36.200 Is that where the conference comes in?

00:36:37.920 Crafting Commerce?

00:36:38.820 The conference is part of that, because if you want to meet

00:36:41.500 people, if you just fly them out to speak,

00:36:43.260 It's a great way.

00:36:44.220 You've got a platform.

00:36:45.120 That's one of those things where you're like,

00:36:46.500 I'd love to get to know Seth Godin better.

00:36:48.400 Oh, well, let's have him come out and speak.

00:36:49.640 And all of a sudden, you can talk to him,

00:36:52.780 or these other people, Mark Manson, Casey Neistat.

00:36:56.440 We have them out to speak at the conference.

00:36:59.180 So I would say we do the outbound on a much higher level.

00:37:02.460 Who are the names that set the boundaries of what

00:37:04.960 we mean by a creator?

00:37:06.340 Because we've moved from email marketing for bloggers

00:37:09.020 to email marketing for creators.

00:37:10.880 So that's why we're pulling in Tim McGraw,

00:37:13.440 and we have these other people.

00:37:15.000 Because that's the whole audience

00:37:16.740 that we're going after, all creators.

00:37:18.560 And so we're looking for those people

00:37:20.880 that will really set the brand rather

00:37:22.940 than the specific revenue from it, in the same way

00:37:25.440 that Nike would be like, oh, this is the athlete

00:37:28.200 that we want to get, because that sets the direction.

00:37:31.380 They don't care about the revenue from the athlete.

00:37:32.880 In fact, they're like, here's $50 million.

00:37:34.920 Here's $20 million.

00:37:37.040 And luckily, we don't have to pay them at that point.

00:37:42.080 But it would be interesting to think about what level do we?

00:37:46.620 Who are those people?

00:37:47.540 Because that's where we want to go.

00:37:50.540 The way you do inbound or content, what do you measure?

00:37:54.020 How do you think about it?

00:37:56.120 Do you have a CAC attributed to that

00:37:58.100 in regards to investing in content?

00:38:00.600 Yeah, we measure things based on leads

00:38:03.080 and then the conversion rate for those leads.

00:38:06.440 so inbound is pretty big for us. Um, we've, we've done a big content play and now the search results

00:38:11.660 are starting to pay off for that. Um, do you have somebody dedicated to just inbound? Yeah. So we

00:38:18.760 have someone doing inbound sales. So the demo, um, demo requests and that kind of thing. Um,

00:38:24.780 and then we have someone else dedicated to the search rankings and, and, and then our marketing

00:38:29.680 team is kind of multifunctional. We've got a copywriter, webinar producer, um, general all

00:38:35.960 around growth marketer, a designer, a developer.

00:38:40.200 And so we try to give them all their own resources.

00:38:42.200 Yeah, like a growth team.

00:38:43.320 Yeah, if they have an idea, they can execute on it

00:38:45.340 start to finish.

00:38:46.040 But you don't have like, do you have certain keywords

00:38:47.960 that you want to rank for and produce content?

00:38:50.020 All right, so they're doing kind of like a performance SEO.

00:38:52.680 I think a lot of people produce content,

00:38:54.440 but it's actually not measurable.

00:38:57.400 John Moreau, who's a brilliant content marketer,

00:38:59.480 he talks about kind of like a lot of SaaS companies

00:39:01.460 should focus on kind of middle and bottom funnel content,

00:39:03.960 Because that's really, if you've got the traffic,

00:39:06.420 that's the kind of content that's

00:39:07.420 going to help them make a decision.

00:39:08.880 Better so economically, it makes sense,

00:39:10.880 versus just top of funnel awareness.

00:39:13.640 But I have some clients that are very deliberate,

00:39:17.100 kind of year three, year five, where they're like, hey,

00:39:19.620 I'm going to double down on content,

00:39:21.360 but I'm going to go after these keywords,

00:39:22.860 because I know what I'm paying in ad spend.

00:39:24.880 So if I can swap that out and have it organic,

00:39:28.180 just takes a while.

00:39:29.880 Is there a certain content format that you're liking,

00:39:32.000 that you're thinking about?

00:39:33.100 Yeah.

00:39:33.600 Yeah, how do you, how do you, I mean,

00:39:35.480 when inbound is table stakes, part for the course,

00:39:39.200 how do you stand out?

00:39:40.600 Yeah, so we thought about that a lot.

00:39:42.820 We had a blog.

00:39:43.540 There's nothing interesting about the blog.

00:39:45.640 We didn't have a unique angle.

00:39:50.320 The content marketing that we did well

00:39:51.900 was the stuff that I was putting out on my blog

00:39:54.520 or telling the story of growing ConvertKit,

00:39:56.440 because we were so transparent, because people were like,

00:39:58.540 wait, you're a distributed team?

00:39:59.940 You know, there were these things that didn't make sense.

00:40:03.100 and so you know we get attention and brand for that type of content yeah and that was good for

00:40:09.960 recruiting yeah and it definitely helped with customers but it's not like the startup space

00:40:15.560 isn't really our audience yeah but then everything on our blog just wasn't that effective and so we

00:40:22.020 said okay what if we did something totally different um that we don't see other people

00:40:25.560 doing and so we came out with an online magazine that we call tradecraft and so we said we're

00:40:30.840 We're going to do one issue a month,

00:40:32.640 and we're actually just going to do 24 issues.

00:40:35.040 So this is a two-year commitment that we're making,

00:40:37.800 because we can get the quality dialed in,

00:40:41.280 cover every topic that a blogger or a creator

00:40:44.520 needs in order to be effective at this.

00:40:48.480 So we have design for non-designers

00:40:50.460 is an entire issue of our magazine.

00:40:54.720 And so we produce 24 of those over one a month.

00:40:59.340 They drop on on the same day.

00:41:01.000 So it's like Tradecraft is out today, Netflix style.

00:41:04.500 And we were able to do a launch every month for our content

00:41:08.460 rather than be like, here's a new weekly blog post.

00:41:11.960 And it worked really well.

00:41:13.100 And now that that's concluded, we're realizing.

00:41:16.200 Are you the primary advertiser of the magazine?

00:41:19.000 Just like, I was like, oh, who made this magazine?

00:41:22.420 Oh, got it.

00:41:23.320 Yeah.

00:41:24.120 Yeah, so there's no advertising in it or anything like that.

00:41:27.900 It does say ConvertKit somewhere.

00:41:29.620 Oh, yeah.

00:41:30.120 Yeah, it's branded.

00:41:32.220 There's no outside advertising.

00:41:34.860 But as we go back now, we don't need

00:41:38.180 to keep creating more content.

00:41:39.360 We have plenty of content on the site.

00:41:40.960 So now we're going back and systematically rewriting

00:41:43.740 and improving tradecraft, saying, oh, this article did well.

00:41:46.600 OK, so that was my question.

00:41:48.360 You repurposed the content from the magazine.

00:41:50.100 But you don't write the blog post,

00:41:52.340 and then grab the blog post, put it in the magazine.

00:41:55.620 So it's the same.

00:41:56.640 Like, if you went to it, you can find one of these individual articles as a blog post on the site.

00:42:04.240 But it only comes out after the issue's been published.

00:42:07.380 Yeah.

00:42:07.840 Okay, and do you guys, I mean, I guess since you publish it digitally, it's available.

00:42:11.500 The whole article's on there.

00:42:12.700 Yeah, it's all just published digitally.

00:42:13.800 Yeah, but so you still get the SEO benefit.

00:42:15.620 Yep.

00:42:16.140 And so now we look back at, okay, which ones are starting to rank, and we go and rework them, flush them out.

00:42:21.220 Put some lead magnets.

00:42:22.480 Yep, build them out more.

00:42:23.800 Because so much of SEO now is saying, OK, that was an OK

00:42:28.720 article.

00:42:29.200 Now let's go make it the best article for this on the topic.

00:42:32.260 And so that's where we're like, we don't need

00:42:34.480 another 100 articles published.

00:42:37.700 Instead, we need to go make these 20 just incredible ..

00:42:41.680 As we wrap up, Nathan, because I want

00:42:42.820 to be sensitive of your time, one question I love to ask

00:42:46.240 founders is, who did you need to become

00:42:48.740 to still be the CEO of this growing SaaS company?

00:42:53.560 that's a good question. Um, the last couple of years has been maybe two different journeys

00:42:59.420 that I've been on. One is like the company journey. Um, certainly the other is like the

00:43:04.060 personal emotional journey of like understanding who I am and who I want to be. Um, probably the,

00:43:10.920 I think the best thing that founders could do, uh, and it's very inexpensive for the return

00:43:16.660 is go to counseling, like going to a counselor and talking through the things in your life,

00:43:23.560 that what's going on your relationships having that time say once a month or every two weeks

00:43:29.200 we're like wait for an hour i'm actually just going to think about these things that

00:43:32.620 it's always noise in the background and you're actually going to clear it out and say we're

00:43:37.000 just going to focus on this um so i actually went to this uh leadership event uh it was

00:43:44.360 billed as a leadership training event it's called reboot it's put on by a former famous

00:43:49.300 venture capitalist named Jerry Colonna.

00:43:50.900 Yeah, dude is amazing.

00:43:52.420 Yeah, it's so good.

00:43:54.400 He's got a superpower of making people cry.

00:43:56.480 Yes, he does.

00:43:57.220 He's so good.

00:43:58.060 He's done it to me.

00:44:00.020 So I showed up for this weekend event.

00:44:02.500 It's a leadership training event for CEOs.

00:44:05.900 And they kick it off of me.

00:44:06.920 There's 15 people in the room.

00:44:08.860 I thought I was kind of a hot shot.

00:44:10.460 As people did introductions, it was like, oh. 1.00

00:44:12.440 Oh, shit. 0.99

00:44:12.940 He's OK. 1.00

00:44:13.900 He does run a billion dollar company.

00:44:15.300 Interesting.

00:44:15.880 Yeah.

00:44:17.300 You know, but there was that, and they said, okay, we told you that, like, we sold it to

00:44:22.480 you that you came here, because it wasn't cheap to be there, that we're going to teach

00:44:25.620 you how to be a better leader.

00:44:28.200 Sorry, we lied.

00:44:29.380 We're not going to spend a minute on that.

00:44:31.140 And everyone's like, what?

00:44:31.880 They got you.

00:44:33.040 Okay.

00:44:33.660 And, like, we're going to spend the entire weekend on helping you better understand yourself.

00:44:38.820 And then who knows where that will go from there.

00:44:42.040 It might have an impact in your relationships, in your leadership ability, in your team,

00:44:46.260 but we'll see.

00:44:47.300 And it was transformational of spending that time understanding,

00:44:53.080 like, why do you do what you do?

00:44:54.960 When someone is spending too much money in the business,

00:44:58.180 they don't care about the budget.

00:44:59.680 They're like, oh, I need more money to do this.

00:45:00.960 Why do I always have such a strong, visceral reaction

00:45:03.140 to it?

00:45:03.920 You know?

00:45:05.060 Turns out it usually comes back to childhood.

00:45:07.140 Childhood. 0.84

00:45:07.640 Crazy.

00:45:08.140 Surprise.

00:45:08.520 Everything.

00:45:09.760 And so digging into those things, and over the last year,

00:45:12.760 my, not just my leadership team, but the whole company

00:45:15.240 is you're a different person based on this journey

00:45:18.720 that you've been on over the last 18 months.

00:45:21.360 And it's been so powerful.

00:45:23.380 Nathan, I want to tell you how much I appreciate you, bro.

00:45:25.560 Thanks for coming on the show.

00:45:26.820 Look forward to watching the journey continue to grow.

00:45:30.360 And congrats again for being on the cover.

00:45:32.700 We'll talk soon, bro.

00:45:33.540 Thanks.

00:45:33.940 Cheers.

00:45:34.440 Thanks for watching this episode of Escape Velocity.

00:45:37.380 Be sure to like and subscribe and leave a comment

00:45:40.260 with your biggest insight from our conversation.

00:45:42.900 Be sure to check out the next episode.

00:45:45.240 Thank you.

Dan Martell - August 15, 2019

Personal Journey Of a SaaS Founder with Nathan @ ConvertKit.com - Escape Velocity Show #8

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