Finding a Niche

Before Nathan Barry could sell his product to others, he first needed to sell it to himself

To call Nathan Barry transparent is an understatement.

Barry — part entrepreneur, part teacher — has built his reputation as a blogger, software designer, app developer and author by not just being transparent, but radically transparent. (Each year he chronicles every detail of his business and personal life, including finances, on his blog.)

Now he’s putting everything he’s learned writing and selling books and building products into ConvertKit, an all-in-one email marketing platform for professional bloggers.

“ConvertKit is designed for professional bloggers from the ground up,” Nathan says. “It’s everything to help you make a living from an audience. Unlike MailChimp or Aweber, which work for a bakery or bicycle manufacturers or whoever, I’ve designed the best practices for selling the type of high-end courses, books and trainings that professional bloggers use to make a living.”

ConvertKit is a web-based application that guides bloggers step-by-step through the process of building their email list, automating their communication and, ultimately, selling products to that list. It then provides detailed analytics about who’s buying, what lead sources are performing best and much more.

“There’s all these things that, as a blogger, you want to know about your audience,” Nathan explains. “Unlike other applications, ConvertKit just tells you.”

Today, ConvertKit is on a roll. It just got to profitability and its customer roster includes some of the most notable names in the blogosphere.

But two years ago, things weren’t looking so bright.

“I started ConvertKit in January 2013,” Nathan says. “The goal was to hit $5,000 a month in sales within six months. I gave myself a budget of $5,000 and my own time.”

With his self-imposed budget, he set to work developing a minimally viable product that he hoped to use to sell pre-orders. “All I wanted to see is if I could sell this thing.”

Six months passed. He missed his goal. Sales were only $2,000 a month, not enough to even cover the expense of paying his contract software developers.

“I kept working on it, but it was really just a side project.” Instead, Nathan says, he continued to focus on his core business of writing and marketing his books, which was doing quite well — pulling in more than $200,000 each year.

ConvertKit founder Nathan Barry wearing his "Teach Everything You Know" t-shirt

But Nathan wanted more.

“I got my books and blog to the point that they were doing $250,000 a year,” he explains. “The first year at $125,000, then $250,000. Then I started thinking about how to double that. I looked at people who were doing $500,000 a year or more, and I looked at their business and all the staff and investment it took to succeed. That’s not what I wanted.”

The risk, Nathan thought, wasn’t worth it.

“It’s a very launch-driven model. Say you make a mistake and you make half of what you wanted on a launch. You have this huge overhead. It felt like you’d always be scrambling to make the next dollar.”

Nathan thought growing ConvertKit could be the answer, but the project had stalled. At this time it was just one of many email marketing applications serving the general market.

“I wasn’t focused.”

Then more than a year later Nathan ran into longtime friend and serial entrepreneur Hiten Shah at a conference. Hiten posed a question that would change Nathan’s eventual trajectory.

“He said, at what point are you going to decide it’s a failure or you’re going to go full time?”

Nathan marinated on that thought, but didn’t make any drastic moves. But by fall of 2014, another friend who had been using the tool provided some additional prodding.

“He said it was too generic.”

And instead, “Pick some market and serve them better than anyone else,” Nathan remembers. “I said alright, email marketing for authors.”

ConvertKit screenshot
The ConvertKit web app. Designed and developed by Nathan’s distributed team.

He began marketing ConverKit to all sorts of authors, many of whom were self-published fiction writers.

“We learned two things: one, focusing on a niche gave us amazing marketing reach,” Nathan says. “The second thing we learned is that authors were a terrible market. Like really, really bad.”

According to Nathan, even though they had the best of intentions, these amateurs never dedicated enough time to the product to learn it and maximize it. The result: they would sign-up, dip their toes into email marketing and when the results weren’t immediate, they’d quit.

ConvertKit was bringing customers in, but they couldn’t get them to stay. “Our churn went through roof,” Nathan says.

Churn: A measure of the number of users leaving or canceling a subscription to a product over a specific period of time.

At this point, monthly recurring revenue had dropped to only $1,300. And Nathan, distracted by several personal challenges, including a large home remodel and health issues brought on by the stress of worrying about money, was at a crossroads.

“I had this advice from Hiten in the back of my head: Shut it down or take it seriously,” Nathan says. “I decided to take it seriously. I needed other people to take it seriously.”

Nathan decided to go all in. He sold some of his investments and poured his time and energy into ConvertKit.

“In February [of 2015] I came up with ‘email marketing for professional bloggers’,” he says. “So I made that switch.”

He recruited collaborators from his past projects to help accelerate the product development so he could focus on sales. “I just kept going on the direct sales and kept landing bigger and bigger accounts. With every sale we got, the next sale got easier.”

Nathan’s newfound focus has given ConvertKit tremendous momentum, getting him noticed by customers and even potential acquirers. Now two years old, Nathan says ConvertKit is just getting started and it is too early to even consider selling.

“We’ve had four serious offers to be purchased. I said no to all of them,” Nathan smiles. “It was fun how easy it was to say no.”

Note: Learn more about ConvertKit or follow all of Nathan’s endeavors at nathanbarry.com.


Photography by Chris Ennis of NuVision Productions