#200: Nathan Barry – The risks of ConvertKit’s rebrand (and how I can become a billion dollar creator)

Nathan Barry [00:00:00]:
When you're announcing so many things at once, like, the meat of it can get lost. And so, we'd been teasing for a few weeks leading up to it, hey, the biggest announcement in the history of the company. With the way we led with it on social, people went, oh, the rebrand is the biggest announcement. Right? ConvertKit becomes Kit. But what we meant as the biggest announcement was launching our App Store.

Jay Clouse [00:00:33]:
Hello, my friend. Welcome back to another episode of Creator Science. This week, I'm joined for the 3rd time by my friend, Nathan Barry. Nathan is the founder and CEO of ConvertKit, 1 of the largest email marketing platforms on the planet. It powers the newsletters of people like Tim Ferris, Ryan Holiday, Andrew Huberman, and Gretchen Rubin, just to name a few. But ConvertKit has evolved a lot and it does a lot more than email, which is why the brand itself is evolving. If you haven't heard, ConvertKit is rebranding. It will soon be known simply as Kitt, a set of tools for professional creators.

Jay Clouse [00:01:10]:
That includes an app store where anyone can develop and expand on Kit to bring in extra tools, a central hub for your data with enhanced reporting, and the biggest and best creator network to help you find collaboration partners. These changes were announced just a couple weeks ago at Craft in Commerce, where I saw them in person and I'm really excited about it genuinely. I think this will have a massive positive impact on ConvertKit customers like me. ConvertKit now offers a free plan up to 10, 000 subscribers. So if you've been on the fence, I couldn't recommend it more highly and I've included my affiliate link in the show notes. Using that link will go to support the show. Anyway, this episode with Nathan is a lot of fun. I asked Nathan some questions about the rebrand, the risks involved, and their new app store.

Jay Clouse [00:01:54]:
I also asked him some tough questions about the Creator Network. We spoke a year ago at CEX when they were just launching the Creator Network, And now a year later, I wanted to check-in on how things are going and ask him some tough questions about subscriber quality, how to actually build trust quickly with recommended subscribers. So you'll want to listen for that. And if you listen all the way to the end of the episode, I tricked Nathan into doing a little free coaching for me. He has a podcast called $1, 000, 000, 000 Creator, and I got to ask ask him some questions about increasing the value of the creator science business. I learned a lot. I think you'll enjoy this 1. And before we get into this episode, I also just wanted to say thank you to everyone who has recently left a review on Apple Podcasts.

Jay Clouse [00:02:33]:
Those go a long way. We're now ranking in the top 50 marketing podcasts in the United States and I really wanna break the top 25. So if you haven't already, please consider leaving a rating or review on Apple Podcasts. If you're not on iOS, a rating on Spotify helps a lot as well. Okay. Enough from me. Let's talk to Nathan. We are 3 weeks removed from the big announcement of ConvertKit rebranding to Kit and a whole other slew of announcements that I imagine you had just a hard time trying to figure out what do I prioritize here because like a footnote in that announcement was polls in email, which we've been wanting for forever that that alone would have been like a great new announcement.

Jay Clouse [00:03:17]:
So first off 3 weeks post announcement. How are you feeling that the rollout of this stuff is going so far? You've tried to rebrand before. I think people may remember that experience, but from my perspective, this experience has been much different. How do you feel?

Nathan Barry [00:03:31]:
Yeah. I think it's been really well received. It's always interesting. You know, I use the the new polls feature to ask my audience and my newsletter, how do you feel about it? And the first thing is it's fun just getting that interaction and it changes that dynamic. I always get lots of replies to my newsletter, but even that, you know, a lot of replies is, like, 20 or 25. And so it's really fun to get, you know, 500 or a 1000 responses to a poll. So in my I wanted to run it in 2 different places. So I ran it in my newsletter, and the response, it was something like 45% positive 40% positive.

Nathan Barry [00:04:07]:
A bunch said it was fine, and then 20% were negative. And then I ran the same 1 on x, and, like, it was 20% that loved it, you know, a bunch more that didn't care, and an equal amount that were, like, I don't like it. And so it's always interesting, like, how your inner, like, inner circle responds versus how Totally. You know, a 100000 followers on x respond. So I feel really good about it. 1 thing that I would do differently is when you're announcing so many things at once, like, the meat of it can get lost. And so we've been teasing for a few weeks leading up to it. Hey, the biggest announcement in the history of the company.

Nathan Barry [00:04:43]:
It's true, but a lot of people with the way we led with it on social, people went, oh, the rebrand is the biggest announcement. Right? ConvertKit becomes Kit. And that's absolutely true, but what we meant as the biggest announcement was launching our app store. And so, like, I think I conveyed that well in the keynote, but then all of our social led with the rebrand, and some people were like, oh, the rebrand's the biggest thing in the App Store. Or some of these other things, like the free plan and polls and all this, spelled like footnotes. And, really, what we mean is the App Store is, like, the biggest platform that everybody can can build on top of. And that will change all of our, you know, experiences as creators the most.

Jay Clouse [00:05:20]:
How are you thinking about this internally? Because I I think a lot of creators struggle with this as well when you have multiple ideas or multiple products in some cases, multiple things that you want to get attention and awareness to at the same time, but you have to prioritize how and when you actually socialize those things so with all of these new call them features or capabilities within the company plus the rebrand, how are you guys thinking internally? How you spend your attention that's coming into the company right now?

Nathan Barry [00:05:51]:
You know, I think the the biggest thing is to remember that you don't have only 1 shot. Right? Like, to get a message out, you have to repeat it many, many times. And that's something that's just as important as a creator because we feel like, you know, oh, I emailed my list about that 3 months ago. Maybe I could do it again. And the great marketers, etcetera, are like, no. No. No. I found a different way to talk about the same thing every single week, time after time.

Nathan Barry [00:06:17]:
Right? Like, you know, if I'm in the middle of a product launch, then I'm gonna be telling these different life stories, customer stories, all of these things that all basically come back to, here's this product, here's why it delivers value for you. And that's just as true as an individual creator as it is, you know, as a software company. And so the big thing I'm thinking about is how to keep coming back to the same message, you know, and really talk about all the aspects of it. So I'll do threads on x about, you know, 1 dedicated to the App Store, 1 dedicated to telling the story behind the rebrand, another 1 dedicated to the, you know, the other new features that we launched, like the new creative profile site builder and polls and other things that, like, in a 25 minute keynote just got, like, 2 seconds. But people are, like, wait. I'm actually really excited about that. So I think just coming back and repeat the same message. What do

Jay Clouse [00:07:10]:
you see as the biggest risk at this point to the rebrand? Like, how would you know that this went wrong? And how would you know that this hit the goals that you do have for it?

Nathan Barry [00:07:21]:
Yeah. So you mentioned that, you know, we'd attempted to rebrand before and that didn't go well. 1 thing that I realized is in the 11 year history of ConvertKit, that's actually like, that was 6 years ago. That's more than half the company ago, which was kind of an interesting so, you know, that 1 didn't work for a lot of reasons. But thinking about this 1, it helps that it's not a huge change. Like, ConvertKit to Kit, you're just cutting, what, 70% of the name out of it. So I think it'll be a lot easier for people to get used to, and then it'll be a lot less jarring than, you know, a complete name change. You know, so if you still like, over time, you'll see a a stray ConvertKit sitting around or you'll be wearing some ConvertKit merch or something, And it won't feel like, oh, that's a completely different thing.

Nathan Barry [00:08:09]:
So I think the things that I'm watching that I'm most worried about would be, well, the SEO side of the name change of going from convertkit.com, which is a very, very high domain authority, well respected site, you know, 100 of thousands to millions of backlinks to kit.com, which is actually also in great shape as a domain. Like, it has a really long, healthy domain reputation. But we have examples like, woocommerce switched to wu.com, and then all their SEO tanks, and they switched back. And I actually know of a few other big companies that are well respected in the space that have domains they want to move to. But after watching what happened to WooCommerce, they're like, oh, never mind. You know, we're not gonna do that. That'd be the biggest thing. Like, search traffic's huge for us.

Nathan Barry [00:08:58]:
We invest a lot in content. So I actually have a call later today with some people who have done some of these massive domain migrations on prominent domains and had it go well. Like, they had a a very slight dip in traffic, and then, you know, they accelerated from there.

Jay Clouse [00:09:14]:
What percentage of new accounts or new trials would you ascribe to SEO at this point, roughly?

Nathan Barry [00:09:20]:
Well, it's hard. Most of the time when people look at SEO, they are lumping together branded and unbranded search terms. So oftentimes, when you're thinking about, like, okay, what's my just my SEO traffic, they combine those together, and they'll see something. Like, for us, I wanna say it's, like, 40%. It's pretty substantial. Now when you split out branded and unbranded, like, our unbranded terms of someone, you know, searching for, like, best email marketing tool or email marketing for creators or something like that. That's substantially lower. Now, in this case, with the name change, the branded matters a lot.

Nathan Barry [00:09:58]:
Right? Because that that is actually the part that you're changing. So for us, there's a huge part of the the search traffic that's at stake. And so to continue to rank for all of our ConvertKit terms and then to start to rank for Kit by itself is really challenging. Now, 1 thing in that a lot of people were saying in the response of, like, oh, kit is too generic. You can't build a brand around kit because it's too generic of a word, and you'll never rank at Google for that. And you see examples of this. Like, if you search intercom, they kind of control the rankings, but there's a lot of, like, shopping results for, like, an intercom that you would put in your office, you know, or your house. Yeah.

Nathan Barry [00:10:37]:
What's interesting is we also bought the company kit.co, which ranks number 1 for just the word word kit. And so it's like, oh, I know for a fact we can rank number 1 for kit. We don't compete with anyone. We are already number 1 for that term. So it'd be really interesting to balance, both sides of it.

Jay Clouse [00:10:54]:
You guys also have the complication that you send emails from the ConvertKit domain on behalf of customers.

Nathan Barry [00:11:03]:
Right.

Jay Clouse [00:11:03]:
Right? So what does that look like in this rebranded world?

Nathan Barry [00:11:07]:
It looks like there will be a lot of ConvertKit dashmail.com links around for a long time. Like Yeah. Part of doing the rebrand in public meant that we didn't have to do, like, this giant cutover all at once. You know, we could say, hey, we're going to rebrand, and we're gonna do that in September. And that really means a lot fewer things have to change at once, which means a lot fewer things should break, and we can do it methodically. So 1 of those things is, you know, warming up sending domains. We're warming up our kit related sending domains now, but we have tons of time. The other thing is with Yahoo and Google changes back in the beginning of this year in 2024, it's a lot more reliant on creators to use their domains.

Nathan Barry [00:11:54]:
Everyone's supposed to have verified sending domains if you're sending, you know, more than 5, 000 emails a month. And so more and more of creators on ConvertKit, soon to be Kit, you know, are using their own domains rather than using our domain for sending. So basically, we'll stay on ConvertKit sending domains for a long time as we warm up Kits sending domains and get to the same reputation.

Jay Clouse [00:12:17]:
This is probably an entire episode that I could have with Alyssa on your team or maybe she even already has but the question of warming up a new domain is something that comes up in my community from time to time when people do their own rebrands or they've been using some other domain when you're warming up a new domain to get good domain reputation. But it doesn't exist yet. How do you recommend people do that? It might differ from what you guys are doing since you're a huge deca $1, 000, 000 company. But what would a individual creator do to warm up their sending domain?

Nathan Barry [00:12:51]:
Yeah. 1st, I'm glad you mentioned Alyssa because she's she and Melissa on our team, Alyssa and Melissa. It's slightly confusing, but they are 2 of the best in the industry at deliverability, and they run a podcast called Deliverability Defined, where they get into all the details on the stuff. But at a high level, what you're doing is first setting up all the relevant tracking. And so, you know, first, you have a verified sending domain. You've set up Google Postmaster tools. You know, all these things so you can monitor the health of it. And then you just start with a low volume and gradually ramp up.

Nathan Barry [00:13:26]:
It's actually pretty straightforward. But you want to start by sending to your most engaged subscribers. So that means brand new subscribers. You know, so if you were to take, hey, I'm gonna everyone who signs up for this 1 lead magnet and then gets a sequence that is well engaged, I'm gonna bring them over first. Or let's say if you have a community. Right? I'm gonna start by sending only my announcements to the community to those people. That way I could post in, you know, in circle or my community platform. Hey, by the way, we switched.

Nathan Barry [00:13:56]:
You know, we're now sending, well, like, in your case of your rebrand to creator science. Right? You can be like, hey, we're now on this domain. If you didn't get the email, check for it. And then you can warm it up with those most engaged people. You can also say, hey. Do me a favor and hit reply. Right? Because that's another good signal to the inbox providers that, like, oh, you know, this is worth paying attention to. And then you just gradually ramp up the volume.

Nathan Barry [00:14:18]:
And so I might move over another lead magnet. And then once you get to a a meaningful volume, watching the quality in Google Postmaster Tools, then you'd make the full switch.

Jay Clouse [00:14:28]:
That's almost what I did. So I'm gonna repeat some of that for folks who are hearing this. Google Postmaster Tools, something I wasn't even aware of until last year's Craft and Commerce during Alyssa's talk. So if you were not looking at Google Postmaster Tools, highly recommend free to set up. It's just like search console but for email deliverability. When I moved to the creatorscience.com domain, I went to my welcome sequence first, but I really like this idea of doing a lead magnet first instead because people are really looking for that free resource and I think that's a great way especially if you are telling people hey hit reply to this email and let me know what's going on in your world that led you to sign up for this list or let me know if I wrote a dedicated newsletter for an issue you're currently facing. What would that be? That's a really smart way of going about it. After a quick break, Nathan and I talk about the Creator Network and what you can do to get the most out of the subscribers you are being referred.

Jay Clouse [00:15:14]:
And later, we have a little impromptu coaching session to get more out of the creator science business. So stick around. We'll be right back. And now back to my conversation with Nathan Barry. I wanna talk a little bit about the Creator Network. We're now a year removed from that being the announcement at Craft and Commerce. How has that 1st year of the Creator Network been?

Nathan Barry [00:15:35]:
Yeah. It's been wild. The traction that we have, especially across large creators is blows me away. So this point, we're at right about 6, 000, 000 subscribers referred to other creators on the network. And so you get a lot of creators where if they've set up, you know, really good connections with other creators, they're doing well. Like, it's it's driving, you know, half or more of their new growth. I I was talking to a creator the other day who's picked up 90, 000 subscribers through recommendations on the Creator Network. Wow.

Nathan Barry [00:16:06]:
So that side of it, I think, is going phenomenally well. Where we're struggling and still let's say, as a company, you're always looking for product market fit, whether that's in, you know, the product you're making as an individual or, you know, as a software company. And at the larger creators, I would say 10, 000 subscribers and up, we have product market fit really, really well. Like, we've nailed that, and, it's really fun to see it. We have not yet cracked the code on the long tail of creators. Right? Someone who's got 500 subscribers or 3, 000. And it comes down to, I think, primarily a matching problem. For you and I to build, you know, lists to 20, 30, 50 +1000 subscribers, right, we have met a lot of creators along the way, and we have a really good reputation to lean on.

Nathan Barry [00:16:56]:
If you're 2, 000 subscribers in, you don't have that reputation. So it's easy for us to be, like, hey, Caitlin, you know, Jay, whoever. Alright. Like, let's partner up. And other people don't have that ability, and so we haven't yet cracked the code in the product of productizing that side of it and really helping creators form connections. So I think that's the thing that we're trying to figure out the most. And we launched the smart recommendations feature, which, you know, we'll start to do that algorithmically. And then we're trying to figure out what other things go into Creator Network beyond recommendations to build those connections.

Nathan Barry [00:17:33]:
And so we'll see how it goes. Like, overall, the volume is fantastic, and then we're seeing, you know, creators at the small end. Basically, it's if you don't know how to network and build relationships with other creators, at this point, we're not solving that problem for you, and we need to. You know? We need to be like, hey. You 2 should meet and build that. So, yeah, I don't know. I'm curious from from your side. Any any thoughts on how it's going or what we should do?

Jay Clouse [00:17:58]:
Well, matching is a hard problem in any communal product. Right? Matching is 1 of the things that I would love to do better in my membership community where it's already inherently small and there's lots of ways that you're actually gonna collide with other people's content, but matching is is such a challenge. This number blows my mind. 1100 people recommending me and 36 a half 1000 subscribers that have come through the Creator Network. So pretty incredible numbers. It's been huge for me in terms of list growth. The rate at which I turn those subscribers into customers is certainly lower than organic subscribers that are coming in through my social media or things like that. And that's 1 of the biggest criticisms I see online is people saying, yeah, but they're cold subscribers and they're they're not as good.

Jay Clouse [00:18:44]:
And I think that's kinda to be expected. Right? People who come in who don't already know you are not going to be as high quality as people who come in who have some familiarity with you. So I'm curious to hear what you see amongst people who are really good at turning Creator Network subscribers into at least consistent openers, if not fans, if not customers.

Nathan Barry [00:19:06]:
Yeah. The the first thing to recognize is where someone is at in the subscriber journey when they join your list. Right? And so if we were to think about the journey and typically the subscription to your newsletter is like actually kind of the midpoint normally. I'm following you on social. I start watching your videos on YouTube, and then I come across a reel that you had on Instagram. And I've, like, gotten hit from 3 or 4 different sides, and then you finally say, hey. I know you're enjoying all this content. If you wanna, you know, have this extra thing, if you wanna download it for free, do that.

Nathan Barry [00:19:42]:
Right? And so I'm like, alright. I'll I'll go opt in for this lead magnet. I'm probably anywhere from days to weeks to even months into my sort of parasocial relationship that I'm forming with you as a creator.

Jay Clouse [00:19:56]:
Right.

Nathan Barry [00:19:57]:
And then I subscribe. Right? So that's normal. So you think about my engagement rate, that's it's gonna be pretty high. Now when you think Creator Network or really even ads of any kind, if wanna put, you know, meta ads or something in in this bucket as well, it's jumping. Like, we're basically cutting off that whole organic, very gradual ramp up. And so you're getting someone, you know, with meta ads, you'd be getting them they're seeing 1 reel. It's got a good hook, and they're like, what the hell? Yep. Put it here's my email address.

Nathan Barry [00:20:25]:
Let's see what's

Jay Clouse [00:20:26]:
got it. This calculator or whatever.

Nathan Barry [00:20:27]:
Yep. So I might have 2 minutes of context before I get there. The thing with Creator Network is that I've got 10 seconds, 20 seconds of context. It's really not much when that subscription starts. And so the number 1 thing to think about is to tailor your welcome sequence and all of your content understanding that. This person is brand new to my content. So, the first thing that I do is I set the context and say, here's how you got on my list. Right? You were referred to me from another creator on the Creator Network, and you can add that little bit of context there.

Nathan Barry [00:21:03]:
And I would have that not only in the first email, but I have that in some future ones. Because they might be like, oh, right. I remember that from 5 minutes ago, you know, or 20 minutes ago. But then 3 days later, they're like, who's Jay Klaus? What is this? I never signed up for this. Right? And so you gotta have that reminder of, like, hey, here's how you came across my stuff. Here's what I talk about in this email. I'm going to help you solve this 1 thing. I also help I help creators grow thriving businesses.

Nathan Barry [00:21:31]:
I help homesteaders not kill all their plants. I don't know. Whatever, you know, niche you're in. So lead with that. Make sure your copywriting is super crisp so you can grab that attention. And then also make unsubscribing really, really easy. Right? Here's who I am. Here's what I do.

Nathan Barry [00:21:48]:
If this is not interesting to you, click unsubscribe right here. No hard feelings. And then, also, I would aggressively remove, you know, in your automation, I'd aggressively remove anyone who doesn't engage. You have a shot at connecting with each of these people, and you're trying it out. And if it's not a fit, move on. That's fine. And so, when you like, the growth numbers that people are getting are absolutely crazy. We basically solved the biggest problem in newsletter growth, which is there's no discovery algorithm.

Nathan Barry [00:22:18]:
And so we've, you know, flipped that on its head and now the discovery algorithm is so good that you've really got to focus on the engagement side. And then, yeah, like I was saying aggressively, call the list if it's not a good fit.

Jay Clouse [00:22:30]:
Yeah. The empathetic human in me wants to take this insight and say, okay, people are just starting their awareness of me. I should do, like, a really slow ramp up and not expect them to become a customer for weeks, months, whatever. And I'll just take it real easy and just do, like, a real soft ramp up into my content. And then there's part of me that thinks I should aggressively try to get them to purchase in the 1st 2 days something and see if I can liquidate that traffic so that I can even do paid ads and drive to it. Curious if you've seen people do like a really aggressive sequence post Creator Network subscription and see success and turning that into customers quickly.

Nathan Barry [00:23:10]:
Maybe taking it a different direction. Have you ever come across a creator where you, like, didn't know their content at all and you discovered them and, like, you binged it. Like, for me, that was Chris Guillot early on where I found his stuff from a guest post on Tim Ferris, and then I think, like, within a couple days, I'd read his entire website. Is is there anyone that you've done that with?

Jay Clouse [00:23:33]:
Oh, for sure. I'm trying to think who comes to mind immediately. Actually, I'm doing some of that right now with Arthur Brooks.

Nathan Barry [00:23:39]:
Okay.

Jay Clouse [00:23:39]:
Yeah. But yeah. It happens all the time.

Nathan Barry [00:23:41]:
Yeah. So what I would try to do is to lead with your absolute best content. And so I wouldn't do the slow ramp up of, like, hey, I'm Jay. Here's the things that I work on. If you're kind of interested, you know, maybe check out this or that or all of that. I would lead with, like, this is the most valuable thing my community has said I've ever made. Make sure it's beginner, you know, or broadly appropriate, you know, if it's, like, the niche thing on how to run a community and all of this detail. Right? But but if you lead with all of that value, then you can get people to go, woah.

Nathan Barry [00:24:13]:
Where did this come from? I gotta go down the Jay Klaus rabbit hole. Like, let's let's deep dive on this. And I think that's so much better than the gradual ramp up. So I wouldn't worry so much about trying to make a sale right away. I would think about how can I make this almost polarizing? Not in a we're not trying to be controversial.

Jay Clouse [00:24:32]:
But selecting. Self selecting.

Nathan Barry [00:24:34]:
Yeah. So this is for me or this is not for me right away. And then what that does is really lets people, like, say, oh, yeah. I'm gonna self select in. I'm a big fan. And so when I do it, I lead with things like my essay, The Ladders of Wealth Creation, which is 1 of the most popular things I've ever written. If I can get you to read to the end of that, because it's, like, 4, 000 words long, you know, then you're gonna be a fan of my content. You know? And if you're like, too long, too nerdy, whatever else, then great.

Nathan Barry [00:25:06]:
Move right along. So I care about making that deep connection, delivering a ton of value more than I care about making a sale.

Jay Clouse [00:25:12]:
I love that advice. That ties into a project I'm midway through right now that I call Project Rabbit Hole because I noticed especially on YouTube when people comment like I just found this and I binged your whole channel. That's the type of activity you want from like everybody, but some form factors are just not conducive for it. Podcasts kind of are because it's in a feed. You can see it. Your blog maybe is, but my blog is not. If I had a better tagging system and almost arrange things linearly and say, okay, you just finished this now, go to this. You just finished this now, go to this.

Jay Clouse [00:25:43]:
Trying to turn a session from, like, consuming 1 piece of content to more than 1 on average, I think it's such an opportunity played out over days weeks months years for the audience. So I love that advice for the Creator Network sequence as well.

Nathan Barry [00:25:58]:
Yeah. And I think you could in 1 of those emails, you could say, here's what I would binge. If you enjoyed this and you want to go down the rabbit hole like this is what to binge next and you could just have you know your 4 greatest things because the other thing, podcasts, newsletters, blogs, they all have the same problem in that they don't recommend what you should listen to next. And then let's say only 20% of your content is binge worthy. Right? That would actually be pretty good, you know, of all the newsletters I put out. And so you have to go through and and curate that and say, alright. These are the 5 greatest episodes I've ever put out. And, yes, I know they're episode 37, 254, you know, and 512, but, like, binge these.

Nathan Barry [00:26:48]:
Then you'll be a fan of me, my style, you know, who I have on as guests. And, you know, then you can get into the rest of the episodes.

Jay Clouse [00:26:55]:
I wanna spend a little bit of time talking about the App Store and what your vision of that looks like 6 months from now, a year from now. Maybe give like some beginner context for folks who weren't at Crop and Commerce or haven't seen the announcements. How does the App Store play into ConvertKit product and where do you see that going?

Nathan Barry [00:27:13]:
Yeah. So with Kit, we want to build a product that is very extensible. Something that I realized I I think creators are the best market to build for ever for 2 reasons. 1st, I learned this from from Pat Flynn in the early days when I realized that, hey. You know, if we serve, like, general small businesses, if we made them really, really happy, they might, like, tell 3 or 4 of their friends at a Chamber of Commerce event. When we had Pat come on as a customer in, oh, 2015 or so, and we make him really, really happy, he tells, like, you know, 3 or 4000 of his closest friends or 30, 000 or more. Right? And so creators are an interesting market from a distribution perspective, but then also there's the fact that they're creators. Like, it's in the name.

Nathan Barry [00:28:00]:
And so, what I wanna do with Kit is build the product that everyone can customize and make their own and build tools for. So, I probably look at 3 ecosystems the most, maybe 4. WordPress and Shopify from the developer perspective. You know, you get all these people building plug ins, apps, that kind of thing. No 1 looks at WordPress and says, oh, I would love to use this. Oh, but you know what? They don't have a way of doing contact forms, so I guess never mind. Instead, they think, oh, let me just use a plug in for that. Right? It extends the functionality.

Nathan Barry [00:28:33]:
And then the other side of it is I look at Figma and Notion. And I know you know this extensively on the Notion side, where you get this whole community building, training, tools, templates around these tools. Right? And so when I look at our audience, I'm like, we're all creators. And so what we're building for Kit is first the app store where any developer can build say like hey, I wish this functionality existed. Let me go and build it. And then also when we have our email template marketplace where people can release free and paid email templates. That's starting to grow really fast. We're gonna do that soon with landing pages, and then we'll do it again with automations.

Nathan Barry [00:29:13]:
And so, basically, everyone can say, hey. Kit is a platform that we all, as creators, can extend in every way. And so the App Store is basically making the shift from integrations, like an integration shares data. You know? So if you're using, you know, say Teachable or Circle or anything like that, and you integrate it with with Kit, that shares the subscriber data. Right? And so I can send an email based on who bought or anything like that. Whereas, an app actually shares functionality. And so, like, 1 of these apps that a developer launched is called Kitboard, and what it does is it's a full creator, like, Trello style CRM built on top of Kit, and it allows you to, you know, track coaching leads or, you know, for your design agency or any of those things. And it actually like, it's a whole product built on top of, you know, the core data inside of Kit.

Nathan Barry [00:30:03]:
So, anyway, that's the high level of the App Store. So my midterm vision is that we get to 25 apps on the store by the end of this year, and we have 5 right now. And then long term, you know, I'm I wanna build, like, the Shopify app store or the WordPress plugin ecosystem, but on top of Kit.

Jay Clouse [00:30:22]:
So when I hear App Store and I hear the Shopify and WordPress examples, it makes me feel like I need to be an engineer to take advantage of this opportunity to extend on top of the kit functionality. When you talk about like the email templates and landing page templates, that seems a little bit more accessible to non engineers. This seems like there's an opportunity for me to create templates and sell them myself. So do you see the App Store almost as a marketplace where there's opportunities for non engineers to create and sell products that generate an income for them? Or is it more engineering focused?

Nathan Barry [00:31:01]:
The App Store is going to be going to tend to be more engineering focused because it requires code. Though some of the initial apps, like, there's an app called Wordsmith that was announced at Craft and Commerce and that takes your YouTube videos and turns them into newsletters automatically. And it uses the Claude LLM from Anthropic to write your newsletter. It, like, generates a style guide based on your voice and all of that. And that app is actually written in Bubble. It's a no code app, you know, and it's now being used by hundreds of creators, you know, in their day to day workflow. And, you know, as as a user, you'd never know, like, you'd never say, like, oh, this feels hacked together or anything like that. No.

Nathan Barry [00:31:43]:
It's, you know, it's, you know, on the biggest no code platform. So there's that side of it. But I think that, yeah, the App Store is going to lean more developer focused and then these other marketplaces, which we're still figuring out, but they're growing. You know, like, if you made it designed a beautiful email template, you can just go ahead and reach out to our team and say, hey. I wanna sell this in the apps or in the, template marketplace, and we'll fire that up. And then once we complete our landing page rebuild later this year, we're basically rebuilding our landing page editor so it's, you know, on par with our email editors that we've rebuilt over the last year. Then you'll be able to build and sell landing page and sales page templates as well. So my, like, ultimate goal is that these creators who love Kit and know it inside and out are saying, like, oh, hey.

Nathan Barry [00:32:36]:
Download these free resources. Here's my sales page template. Or even here's this entire package. Right? I have extended the kit to do all of these things that you didn't think it was possible, and it's a combination of this sales page, you know, install this app to plug in this 1 gap in the functionality, and here's the email templates, and here's the entire automation. And so eventually, you'll be able to just install 1 automation, and it'll have all that going all the way through.

Jay Clouse [00:33:03]:
Because you can already share, like, templates for automations. There's a world where I take a week and I say, here are the 5 visual automations that I use that I think are most applicable to other people. Here's a version of my custom HTML email template. Here's a landing page that I create like yeah. I could right now take those things. I could probably hack it with ConvertKit Commerce, but I'm not personally sure how I would do that in a convert sorry, a kit. I'm learning. Maybe I should say ConvertKit soon to be kit.

Nathan Barry [00:33:34]:
Yeah. It's a hard thing, though. I'm Charli, our creative director, I was asking her, like, how do I handle this in the middle of the rebrand? And she goes, ConvertKit is our past and our present, and Kit is our future. So when we talk about I talk about, like, oh, we're building this marketplace for Kit. Like, it's going forward. But if I'm like, this functionality in ConvertKit. So it's this weird transition period for the next 2 months.

Jay Clouse [00:33:54]:
This This is this is already something that I can kind of do in a hacky way, but I'm not familiar with a way that I could plug in some of my existing assets, templatize them, and sell them through Kit. Does that exist now?

Nathan Barry [00:34:08]:
So it exists that you could do it individually like you're doing with Notion. In ConvertKit Commerce, you could go ahead and and set that up. We don't have the public directory yet where we're driving traffic to, like, automation templates, for example. We do have it for email templates. So if you go to convertkit.com/marketplace, then you can see the free email templates and the paid ones. I actually had this fun moment where there's a great designer named Rafal who's designed a lot of stuff for us over the years. He designed my personal website back in, I don't know, 2018 now. But he's designed some email templates in the marketplace.

Nathan Barry [00:34:44]:
And so Caleb Wajic, who's another good friend of mine, was like, hey, I'm gonna reboot my newsletter. He went to the marketplace. He bought a email template. You know, 1 of Rafal's templates. And Rafal's like, woah, I didn't realize that. So, like, Rafal's already on Caleb's list. And then, you know, happens to see that

Jay Clouse [00:35:00]:
That's funny.

Nathan Barry [00:35:01]:
He gets a rebranded newsletter using a customized version of his template. He's like, oh, I made $40 off of that. And, you know, Andy gets to see his work in the wild. So it's a lot of fun. We're seeing more and more of that happen. And there's other creators, you know, like, you know, on the training side. Right? Brennan Dunn has made a huge amount of money, like, training people on, you know, how to use ConvertKit. Brad Hussey just came out with a great YouTube video on how to automate, like, your entire podcast sequence and all this stuff, and he can just go ahead and share that.

Nathan Barry [00:35:32]:
You know, he wrote all this pretty advanced code into a bunch of it, but it's like, hey. Just import this. So it's coming. It's gonna be

Jay Clouse [00:35:39]:
That's awesome.

Nathan Barry [00:35:39]:
If you imagine, what's happening for Figma and Notion where the product is good, but the community makes it 10 times better. That's exactly what we're trying to do.

Jay Clouse [00:35:49]:
After 1 last quick break, Nathan and I dive into the creator science business and what I can do to increase the enterprise value of the company. This is really insightful. I think you're really going to enjoy it. So stick around. We'll be right back. And now please enjoy the rest of my conversation with Nathan Barry. I wanna spend the last 15, 20 ish minutes talking to some $1, 000, 000, 000 creator stuff because I've been listening to podcasts. People listen to this should subscribe to $1, 000, 000, 000 creator wherever you get your podcast.

Jay Clouse [00:36:18]:
And I'm trying to apply some of it to my own situation. So I'd love to think through some of this and tell me if my assumptions are correct. I'm in a position that I think a lot of creators get to where more or less behind your own name, you get to pretty good cash flow and you realize, okay, this is working, but it's kind of like having a Honda Civic that you've really souped up and you're like, wow, I can't believe this car is going this fast. But if it goes faster, it's probably going to explode. So the future feels like 1 of 4 options for somebody in that circumstance. 1 status quo. You continue to create new products. You kinda cash flow and chill and put that cash where you want it.

Jay Clouse [00:37:02]:
2nd seems to be to adapt to become more of an enterprise that you create enterprise value in. 3rd could be starting an entirely new enterprise that you're gonna create enterprise value in. And 4th would be to diversify through joint ventures or using your influence to invest in other people's enterprises. Do you agree with those possible futures? And is there anything that I'm missing?

Nathan Barry [00:37:29]:
I think those are the broad categories, but I would back up and just say what are we optimizing for? Right? Because you're at this point where if we rewind the clock, to me, that'd be back to, you know, 2012, 2013. It's like, hey. You won the game. Whatever you set out to do, you're making more money than a doctor. Right? And you're doing it by connecting with people you think are amazing, teaching them the things that you know and love with complete schedule flexibility and everything else. And so, first, like, acknowledge, alright, you've won. And now what's next? What are we optimizing for? And that could be for, you know, learning something amazing, could be building generational wealth, you know, a a full exit so you don't have to work at all. And that's why I'm curious for you.

Nathan Barry [00:38:16]:
What like as you pursue this question of what's next, what are you optimizing for?

Jay Clouse [00:38:21]:
Yeah. It's a good question. It's something that I think I'm thinking through in real time and kind of considering these potential futures because you're right. I have like won the game, which for a long time has been I want to create month to month financial security where I'm comfortable and I don't have financial stress and I can take care of my family for the the amount of comfort that we require. But as probably most people can attest to who are listening to this, it also requires a lot of ongoing effort to maintain that status quo. If I stopped showing up online, things would persist for a while to some degree, but they would certainly degrade over time. And that feels like it just feels inefficient. It feels like an inefficient way to build a business where you have this, like, key man risk where if something happens to me or if I lose steam or lose interest, this thing kind of goes up in smoke.

Jay Clouse [00:39:19]:
So I think what I'm optimizing for is reducing key man risk over time while providing the same type of outcome for my family.

Nathan Barry [00:39:31]:
Yeah. Okay. That's super helpful. And for anyone like, following along and thinking, okay, what am I optimizing for? 1, I'll say, it's totally fine to say money. Right? Like, I think that there are aspects where we're supposed to say, like, oh, you know, it's about impact or all that, and that that is absolutely true. But if you can say, like, look, I want to make this amount of money, or or even just to say, I wanna know what I'm capable of. Right? I wanna know how far I could scale this. You know, in like, video games are fun because you get to see, can you beat the system? Can you figure out how this works? You know, can you achieve a higher and higher number? Business is fun for a lot of similar reasons.

Nathan Barry [00:40:10]:
You know, like, I played video games some as a kid. I don't now. I played business instead, and I like it more. And so Sticks

Jay Clouse [00:40:18]:
are higher.

Nathan Barry [00:40:19]:
The stakes are higher, but it's a ton of fun. And so when you're talking about optimizing for reducing key man risk in this season, I mean, there's a lot of ways that you can do it. Probably the first thing that you've already done is to move from an individual brand, like, you know, your name.com or like that really focused to something that can be bigger. Right? Creator science is already something that can be bigger. And so, like, I would look to examples of people who have done that. Right? Who are creators who have most successfully reduced Keyman risk? Maybe Dave Ramsey comes to mind, Right? As someone who he's realized, okay, I don't know that I wanna spend or be required to spend 2 and a half hours a day on the radio. I think he actually truly loves that, so that's what he's optimizing for. Right? So he started to build out a network.

Nathan Barry [00:41:15]:
Right? He's got other people. Pat Flynn has done this with Smart Passive Income, right, where he's saying, okay. How do I make this something bigger than myself? And so I'd look at that side of it. I think, also, as you reduce key man risk, you have to be clear on if you're optimizing for cash flow or enterprise value. And they're not at odds with each other. Like, most people wanna put things in life on, like, a single axis spectrum. Right? It's like you can grow fast, or you can be profitable. You can optimize for cash flow or enterprise value.

Nathan Barry [00:41:48]:
And it's like nothing in life actually exists on 1 axis. There's always 2. Right? You but knowing where you want to focus is really important. And so, we would approach this very differently if you're saying, hey, I wanna build a product that I could sell. Build a company that I can sell and exit my stake in, and move on and still retain my brand and everything else I'm doing, versus, hey, I wanna get to the point that I'm personally taking home, you know, a 100 or 200, 000 a month in cash flow that I'm dumping into the s and p 500. Because there's a point where it's like, okay, key man risk. It's like, alright. But if you've got $5, 000, 000 in the S and P 500 because you've just been dumping cash in there for Yeah.

Nathan Barry [00:42:28]:
5 or 10 years straight, like, you kind of reduced a lot of Keyman risk without changing a single thing about the product or brand. So I don't know. Yeah. Give me some thoughts on on all of that.

Jay Clouse [00:42:38]:
Well, first of all, I hope people understand the terms key man risk and enterprise value.

Nathan Barry [00:42:43]:
I feel like maybe I should have defined those. Yeah.

Jay Clouse [00:42:46]:
Is yeah. Okay. Yeah. Maybe pause and and Google those things. We won't waste our recording time on it. Yeah. Well, here's what I'm thinking. If you reduce Keyman risk, then you're probably setting yourself up where there is enterprise value like it almost seems like it necessitates that by doing it.

Jay Clouse [00:42:59]:
So that's why right now my standpoint is well if I reduce key man risk is move me in the right direction because there's a world where I am just cash flowing. I'm putting stuff away and if 5, 10 years down the line, my interests change, You don't want the thing you spent forever building just to go to 0. Like people probably want to capture some value out of that even if they are no longer the person running it. So it feels like the grown up mature way to build a company is to create enterprise value, and the way to do that is to reduce Keyman risk. That's kind of where I'm at. But the actual logistics of doing that feel very challenging in this moment.

Nathan Barry [00:43:40]:
Yeah. So I'd look at the ways that you've already started to do that. You know, so if you look at Creator HQ, for example, right, that's a you've branched out from, like, purely a training product, you know, like or before having, like, training and community being the main things and saying, okay. Now this is something, like, Creator HQ is valuable to someone even if they have no idea who you are. Right?

Jay Clouse [00:44:04]:
Totally. You

Nathan Barry [00:44:05]:
know? And they're like, I learned nothing from you. You know, like, it's valuable as a and so you branch into another category. Now when I think about companies or people who pull off like a $1, 000, 000, 000 creator playbook, there's really 3 things that I see every time. First is they build more than a personal brand. Right? And so you've already done that. You've made the leap from, you know, J. K. Class focused to Creator Science, and then really Creator HQ and others are branched off of that.

Nathan Barry [00:44:36]:
The second thing is they sell products rather than attention. And so there's different categories of products, but a lot of people, you know, in in the creator space are fully optimized around advertising and sponsorship revenue. You're not. Right? You're so you're already making that Mhmm. Selling products. But then the third thing is driving recurring or repeat sales. So for example, Creator HQ as a product is interesting at 297. Right? Because it generates its revenue and all of that.

Nathan Barry [00:45:09]:
But if you're talking about optimizing and growing enterprise value, it's gotta be a recurring product, which means it has to provide so much value that it's worth paying for on a recurring basis because you need to not just be feeding new new customers in. There's also a bunch of, like, relatively small tweaks that happen that totally changes the relationship on enterprise value. So 1 is, like, the jump from 1 time sales to recurring sales. There's a company in the creator space called Thrivecart, and they've made a ton of traction based on the fact that they are a 1 time sale product. You buy it 1 time, and you get to use it for a long time. Now, they make plenty of money on payment processing, and so that's sort of their recurring side of it. But if they wanted to ever exit, like, for a substantial multiple, it has to be a recurring product. Right? The market does not value 1 time sales like they do recurring.

Nathan Barry [00:46:04]:
But then the other thing is the jump from an add on to another ecosystem versus a standalone product. So, for example, years ago, Syed Balki had OptinMonster. He still has it now, but before it was a WordPress plugin. And so, it was a WordPress plugin for email capture. And at some point, they rebuilt the entire thing. Same value proposition and all that, but it was no longer a WordPress plugin, and it was an entire SaaS platform. And by jumping out from being a part of the ecosystem to being a standalone company and entity, the value of the company went up so much, both in the perceived value of what people are willing to pay, but then also just the value delivered to users. And so, like an example of this is like, okay, what is Creator HQ not built on Notion? Right? What is Creator HQ as the next, you know, creator SaaS platform? Right? So those are the things.

Nathan Barry [00:47:05]:
Creator HQ is a template. If you got it to, say, $1, 000, 000 a year in revenue, you could exit that business for $3, 000, 000, for example. But Creator HQ is a standalone SaaS platform, you get that to a 1, 000, 000 ARR, you could exit that for 8, 000, 000 if it's growing at a decent pace. Those are some fundamental switches. But you're iterating into it in a really smart way.

Jay Clouse [00:47:26]:
Let me ask you this. There's a moment in time for I don't know, somewhere between 3 5 years ago where there was a lot of buzz behind the idea that existing SaaS companies or we can even just say product companies We're starting to buy media companies for the audience, the distribution, not necessarily the products those media companies were creating. As we sit here in mid-twenty 24, what do you think that looks like as the founder of a SaaS company? Is there value in media companies purely for their audience and trust and distribution today? Is that a way to build enterprise value?

Nathan Barry [00:48:04]:
Yeah. It absolutely is. So long as you do it in a way that reduces key man risk. You know exactly like you're talking about. Right? If someone were to buy creator science, like, that could be very valuable. But if Jay is selling creator science because he immediately wants to, you know, drink margaritas on the beach and he's not around anymore, then, you know, that might be 3 quarters or or more of the value of creator science in its current form. The idea of established companies buying media companies is interesting because it comes back to the same idea that the $1, 000, 000, 000 creator is built around. Which is well, I guess a few things.

Nathan Barry [00:48:40]:
1st, attention is 1 of the most valuable things in the world. Right? People are spending 100 of 1, 000, 000, 000 of dollars to get attention through advertising. Creators have that attention. They get it I was gonna say for free. They get it through a whole lot of very hard work to make content. And then it's a matter of where do you direct that attention? And so if, for example, you're directing all of your attention on creator science, you know, you're saying, hey, the thing you should buy is creator HQ for $297. That's 1 level of lifetime value that that's gonna have, but it's not gonna compound in the same way. Whereas, if the thing you're saying is, like, hey, you should buy kit, where someone ends up in this whole ecosystem, and they're spending money on advertising, they're earning money, they're processing payments, all of this.

Nathan Barry [00:49:33]:
Right? That same bit of attention is probably worth 10 times as much to us at Kit as it is to you and Creator HQ. So I think things like that are really interesting. The best example I've ever seen of pulling it off is when HubSpot bought the hustle because they basically said, hey, you guys are making 10 to, I don't know, $15, 000, 000 a year, is my guess, selling advertising. We're a $40, 000, 000, 000 a year company. Or 40 I'm sorry. 40, 000, 000, 000 in enterprise value. Right? And so if we buy you guys and direct like, just take over all your sponsorships, then that's going to be like, we're better at monetizing that attention than you are individually. And then they've gone on like, I think a lot of people don't realize that The Hustle owns the My First Million podcast.

Nathan Barry [00:50:22]:
And Sam and Sean are, you know, well paid hosts, and they've got, you know, their ability to promote their own stuff and all of that. But HubSpot acquired it when they acquired the hustle, and so that's turned into something very viable.

Jay Clouse [00:50:35]:
And it's interesting because Sam's always been so good at hiring really great people within the company. Right? So when you buy the hustle, you're buying writers that staying the same. The relationship of the reader is to the hustle more so than any particular byline. And it's also interesting because if the hustle was doing to $15, 000, 000 a year in advertising and they're bought for somewhere in the realm of $20, 000, 000 which is I think what Sam has finally started to say publicly.

Nathan Barry [00:51:02]:
I think it's 28.

Jay Clouse [00:51:04]:
So it's like a 2 x multiple on a media company. But then again, like, HubSpot's not really looking for advertising revenue. They're not even valuing advertising revenue probably in the same way because they're taking over that advertising. So it's an interesting way to build enterprise value, but it does seem relatively less than building enterprise value through your own standalone products.

Nathan Barry [00:51:26]:
Yeah, and it's just what you demonstrate. Right? If your goal was to sell I mean, we're just running with Creative Science as an example. But if your goal was to sell Creative Science as a whole company and say, hey, I wanna exit this, then 1 thing that you would do in that process is you would sell products to prove that your audience buys this type of thing. It might not be the exact, you know, thing if you're trying to sell to a Kit or HubSpot or, I don't know, it's a vidIQ or someone like that. But you would demonstrate like, hey, we're able to convince a 1000 people to buy this thing. I bet we could also get a 1000 people to buy this, you know, SaaS offering from you guys. And that demonstrates this willingness to pay. That's really important.

Nathan Barry [00:52:12]:
1 other thing, you talked about, you know, key man risk and building enterprise value and all of these, you know, as we get into, like, very corporate sort of terms. Though they're important to learn for a reason. You just end up building a better business. Like, I think if you build a business that you can sell, and then not sell it, like, that's the best thing. Is you build a business that you're like, oh, I can walk away from this at any time. It's so well run. I've got really sound strategy. We know where we're going years out.

Nathan Barry [00:52:42]:
I've got flywheels running in each of these areas. It's not dependent on my time. All of this, you know, like, this business is perfectly sellable, but now I'm not gonna sell it. Like, that is the ultimate place to be because you have complete decision making freedom. You've built a business that's a joy to operate, and then you don't have to part ways with it. You can keep building and scaling and letting it compound.

Jay Clouse [00:53:06]:
And that's exactly where I'm coming at this from because Creative Science has 2 full time employees and they're about to go on paternity and maternity leave in the next 3 weeks. So I'm thinking, man, if I would have designed this to be sold, this would be much less of an issue. Yep.

Nathan Barry [00:53:21]:
There's I've definitely definitely been there. But I think, yeah, there's this idea around selling that that people are like, oh, you know, I'm never going to sell, and so I won't optimize for these things. And I would just say that the like the markets value certain traits in a business for a reason. And so you should pay attention to that. You know, recurring revenue, a valuable brand, operates without the founder, all of those things. And build towards that even if you have no intention to sell.

Jay Clouse [00:54:00]:
If you enjoyed this conversation with Nathan, please take a look at our show notes. I have an episode of his $1, 000, 000, 000 Creator podcast linked. It's an episode with Charlie Prangley, ConvertKit's creative director, and they talk a lot more about the rebrand. And if you wanna hear more from those 2 of us, I've also linked my previous 2 conversations with Nathan where we discuss the Creator Network and moving from digital products to software. Thanks for listening, and I'll talk to you next week.