ConvertKit expands into music, innovates email marketing technology

“It’s going to be big.”

Email marketing platform ConvertKit is expanding into the music realm, and pioneering technology to feature original videos in digital newsletters.

This April, ConvertKit acquired FanBridge, an email marketing platform utilized by thousands of musicians, growing the creator population of, primarily, bloggers and podcastors.

Image provided by ConvertKit.

Nathan Barry is one of those creators, and the founder of ConvertKit. His background is in user experience (UX) design in the Boise area. Following his own blog creation on an email platform, Barry wrote a book called The App Design Handbook to, hopefully, generate contract work.

It turned into more.

“My goal was for it to be like this great calling card that I put out there,” Barry said. “It ended up making $12,000 in revenue on the first day that it came out, mostly to my email list of 800 people, and I was blown away. And so [I] actually didn’t take a single freelance client after that point, I was all in on building an audience. Learning email marketing, you know, and creating digital products.”

Barry immediately found the email platform he was using to be too limited. Just three months after releasing that book, Barry set out to build ConvertKit.

There are now 36,000 paying users, and about 300,000 free users. The company is at $28 million in annual revenue, with 65 people on the team, and has brought in $0 of outside funding, “and we intend to keep it that way,” Barry said.

ConvertKit, founded in 2013, “exists to help creators earn a living online.”

Calvin Arsenia, a creator using ConvertKit. Image provided by ConvertKit.

In addition to creating tools for poets, chefs, makers, YouTubers and other creators, Barry is the co-founder of a new local email newsletter (run entirely on ConvertKit). For the past three months, From Boise has focused on the stories of local people, activities, places and history. 

“As we’ve built ConvertKit out to be a creator platform — you can do your publishing, you can sell products directly through ConvertKit, you earn a living, all of that — From Boise is the first example of that,” Barry said. “It’s still in the early days; we’re just about to pass 1,000 subscribers, but it’s fun. After doing everything, like, nationally and internationally, now it’s fun to have a project that’s just here in Boise. I want it to grow into the primary place for in-depth profiles, to learn about the people behind a specific business or the story behind something, so much less focused on news and more focused on who people are and why they do the things that they do. My hope is to just be way more plugged into Boise as a community through it.” 

The idea came from a friend who lives in Victoria, on Vancouver Island. 

“And he grew it into something quite successful,” Barry said. “He was able to have a huge impact in the community and really be a part of it and so I thought, that’s amazing. I love Boise at least as much as he loves Victoria, and so I want to do it here.”

Boise Entrepreneur Week, Built in Idaho and Trailhead appreciate the opportunity to have had an in-depth conversation with Barry:

What does the recent acquisition of FanBridge mean for ConvertKit?

“We’ve been expanding for the last 18 months into the music industry. We’ve always served creators, which is usually bloggers, podcasters, authors, and we’ve had some musicians. And so as we had growing that space we looked to who are the biggest players in email marketing for musicians and FanBridge came up. There’s a whole range — Leon Bridges, Mandy Moore, Fantasia, Maggie Rogers and plenty more who joined people like Tim McGraw and Matt Kearney and others. It really just accelerates all of our progress in music, and it was pretty fun to have Billboard cover the announcement, and then just so many more partnerships (and more) have come out since then; that’s been good.”

With this acquisition, what comes next? 

“Building features and functionality directly for musicians, as well as podcasters and others. For example, we just released an integration with Spotify, to be able to bring in your latest song or podcast episode, anything like that, directly into your email or landing page in ConvertKit. Another big one is we just released video in email, being able to play video natively in an email, which no other major email service provider does; they all do it where they link out to the image or to the video and have an image in the email. We’re releasing (other) integrations, like now that touring is coming back we’re releasing integrations with tools like Bandsintown that will show all the tour dates, that kind of thing. It’s going to be big. We’re still in the early stages of releasing it but even just seeing the engagement on people’s emails when it’s there natively versus when it’s linked out to is pretty huge.”

With that innovation, are you all doing any fundraising or series funding?

“We are not raising money. We actually haven’t ever raised money. ConvertKit is entirely self-funded, just revenue from customers. We’re one of the largest bootstrapped startups in that way. Really, the thing is, if you take money from investors, then you’re on their timetable, and you’re working towards their outcome and their outcome is always an exit of some kind, either through an IPO or selling to another company, and we want the creators we serve to be who we answer to, who we build for. We can build on our own terms, stay at it for a long time, and really serve creators.”

So then, how did you make it work financially?

“I think our journey took longer, because we didn’t raise funding. The early days were slow. I did a lot of the work myself (in) initial design development. Sales and marketing, that was me in the early days; so we built the team more slowly because that’s what we (could) afford. We also focused on channels like content marketing, sales, and an affiliate program that didn’t require a lot of money upfront, and it was actually quite a bit later that we did paid marketing like buying Facebook and Google ads. … Whereas a venture funded company would probably spend aggressively on paid marketing from the early days. Really, it helped us be a lot closer to the customer, because we had to make money early; we had to really solve a problem that the customer was willing to pay for. I think it served

Courtesy ConvertKit

us really well.”

How do you keep yourself from getting distracted by the “idea fairy,” if you do?

“There’s always lots of new ideas, and there’s probably times in the company where we’ve gotten distracted and spread ourselves too thin by pursuing too many things. It takes a level of discipline. It takes a team that’s bought into listening to that idea and then saying, ‘Great, let’s put that on the shelf; let’s let that sit for a while and see if it’s actually a good thing,’ rather than diving right in. I think our emphasis (is) on data in the company, really diving into ‘what does the data say is working,’ rather than what do we think is the new exciting thing. Too many people (say) something like, ‘Oh this is working and so now let’s move on to the next thing and the next’ and you’re like, ‘Wait, why is the company not growing anymore?’ Well because you moved on from the thing that was working. It’s definitely been a challenge, but I think you just have to remember to double down on the things that are working.”

How can you tell when it’s time to try out something new, or innovate? For example, how did you know it was time to do video in email?

“We try to think in terms of systems. In his book Good to Great, Jim Collins talks about flywheels, and (for) the companies that set up flywheels really well, the systems that keep operating. We set up our engineering and product teams as flywheels, and so they are set up to innovate continuously. Sometimes it’s on improving the existing functionality, other times it’s on building new things like video in email. And so, we let them. It’s just a matter of priority … basically whatever we’re feeding them is that pipeline that they should be working on. In the early days, (ConvertKit) required a lot of adding new features, to compete with other really large companies. We had to do things like that … they just had so many years to build features. Whereas now, we can focus on quality and making the application really fast and easy to use; then we save the new features for things that we think are going to be groundbreaking, like video in email. But even that, you know, things like our integrations … are really to make it all easier and faster to use. For example, when you’re a creator and you want to include your Instagram images, you don’t have to go out to Instagram separately and download and upload and all that; you can just connect your Instagram account to ConvertKit and drop those images right in. We want the musician to be writing songs; we want the author to be writing that next book or essay, (the food) blogger to be writing the next recipe. Rather than spending all of their time in ConvertKit. There’s a lot of software products that are actually trying to maximize time in the product, and we’re oddly trying to do the opposite.”

What other advice do you have for those in the early stages of a startup? 

“Paul Graham talks about Patrick and John Collison, the founders of Stripe, where they would sit down and help you set up payment processing for your app, like right there on the spot, get out their laptops (and) do the whole thing. And everyone looks at that and (thinks), ‘Oh that’s nice; that’s a cute story.’ But they kind of missed the lesson, like, ‘No really, you have to do that.’ And for the first two years of ConvertKit I tried to do things that would scale, like using content marketing to get customers. And when ConvertKit actually got traction is when I doubled down and listened to that advice from Paul Graham: Do things that don’t scale. So we started doing things like direct sales to get a single customer. We’d spend hours and hours to get one customer who would pay $50 a month; that is not at all profitable; that doesn’t scale, especially having the founder do it. And then we (ran) into problems, like switching email platforms is actually quite a bit of work. And so, in order to convince someone to switch … I would say, ‘Oh, I’ll do the switch for you for free.’ And that’s where our concierge migrations came from. What I found is every customer that we got made getting the next customer just a tiny bit easier. And then obviously it did scale, because now we have teams doing that and we have dozens of migrations a week and hundreds of thousands of users; it obviously pays off.”

And, what advice do you have for some entrepreneurs who are more at your point?

“Really look for those flywheels — what are the tasks that you can repeat over and over again and build into a system where every time you go through the flywheel, it gets easier with each rotation. So, for every new customer that you bring on, do you have a step in that process, that is creating a case study or a proof point or testimonial that you can then use to win the next customer. First read Good to Great (by Jim Collins) then also read his short little book called Turning The Flywheel; it’s like an extra chapter from Good to Great.”

Regarding the newsletter, how did you know that it had a good chance of working?

“That’s the thing with entrepreneurship, we don’t know if it’ll work yet. It has initial traction … Seth Godin talks about this in his book called The Dip, which (looks at), ‘What do you do once you get the initial spike? Are you going to persist and build the systems and all that, or did you just do it … (to) ride off the initial momentum. In entrepreneurship that doesn’t work for very long. The test for Marissa and I and, you know, any other founder creating something, is ‘Do you have what it takes to persist through that dip and to keep going for the years that it’s going to take to build it into something meaningful?’ That’s what I was able to do with ConvertKit and so that’s why I’m confident I’ll be able to do the same with From Boise.”

How did you know you were offering something unique, as opposed to what else is already out there?

“I think it’s that so much else is focused on news, like stories about recent news, but what are the things worth telling that aren’t newsworthy, that aren’t recent, that don’t have a date, an event, an acquisition, something else tied to it? I don’t think people focus on that right now. I want something that’s dedicated to it. I guess I would say, this is another case of just making what I want. Like, I want this thing to exist and so it’s going to exist, and I think that other people will like it and enjoy it as well.”

This article was created as a collaboration between Boise Entrepreneur Week, Built in Idaho and Trailhead.