Dan Martell - August 15, 2019


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


Episode Stats

Length

46 minutes

Words per Minute

192.67662

Word Count

8,912

Sentence Count

686

Misogynist Sentences

5

Hate Speech Sentences

2


Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

In this episode of the podcast, we sit down with Nathan Berry, CEO of $15M+ ecom startup, SAS ConvertKit, to talk about how he built a company from the ground up, how he got started in ecom, and what it took to get to where he is today.

Transcript

Transcript generated with Whisper (turbo).
Misogyny classifications generated with MilaNLProc/bert-base-uncased-ear-misogyny .
Hate speech classifications generated with facebook/roberta-hate-speech-dynabench-r4-target .
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.
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?
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.
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.
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.
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,
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,
00:28:50.760 they're useless.
00:28:52.800 I remember Chris Guillebeau told me once, he was like,
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.
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,
00:31:23.300 they'd go like, man, Dan is either dumb or lazy.
00:31:25.960 Because I mean, that's just, but I
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.
00:44:12.440 Oh, shit.
00:44:12.940 He's OK.
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.
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.