Latest / Success Story with Scott Clary / Lessons - He Turned Down Every Investor and Bootstrapped Kit to $40M a Year | Nathan Barry - Kit Founder & CEO (Powers James Clear, Tim Ferriss & Arnold)

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Lessons - He Turned Down Every Investor and Bootstrapped Kit to $40M a Year | Nathan Barry - Kit Founder & CEO (Powers James Clear, Tim Ferriss & Arnold) · Success Story with Scott Clary

• 0:00
  In this lessons episode, discover how creators can turn audience attention into lasting business value.
• 0:05
  Understand why product market fit matters before launching a product.
• 0:07
  Explore how testing audience demand reveals stronger opportunities and uncover why great operators and real customer pain points are key to building a scalable creator business.
• 0:25
  How do you become a billion dollar creator?
• 0:29
  Oh, yeah.
• 0:30
  It's a high level, but, you know, kind of a challenging question at the same time.
• 0:34
  The idea behind a billion-dollar creator is taking something that is so, so valuable, which is attention.
• 0:41
  This idea, you know, attention is one of the biggest currencies that we have out there.
• 0:46
  Companies are spending hundreds of billions of dollars to buy attention through ads.
• 0:50
  And as creators, we have attention in spades.
• 0:53
  That's what we're the best at.
• 0:54
  It's creating and capturing attention.
• 0:57
  So it's taking that attention and then pointing it at something where you have real equity value.
• 1:03
  So a lot of creators are just thrilled to be, you know, earning a full-time living, paying their mortgage, that sort of thing.
• 1:10
  And they kind of scale up in there and say, okay, what if instead of making money off of affiliate products or some ad revenue, what if I was making it off of my own products, you know, and I'm selling courses, training, all of that sort of thing.
• 1:25
  But really the ones that become billion-dollar creators are the ones who build, use their audience and attention to build a brand with lasting equity value.
• 1:36
  So one of my favorite examples is Mark Sisson, who had a blog called Mark's Day of the Apple, who was one of the first paleo diet, paleo lifestyle blogs.
• 1:47
  He got that to the point where he was earning millions of dollars a year, which is fantastic.
• 1:51
  This is probably 2013 and 2015, around that time.
• 1:55
  And then what he did is he used that platform to launch a brand called Primal Kitchen, which is all around, you know, making a paleo friendly mayonnaise and then got in solid dressing and other sauces from there.
• 2:12
  And he was able to use that audience to launch.
• 2:15
  So it was really hard in consumer packaged goods and scale it up.
• 2:20
  And within a few years, I think three or four years, he sold it to Kraft Foods for $200 million.
• 2:26
  And so he took what was a good business and then instead of selling attention, he sold products and he scaled that up to a massive exit.
• 2:37
  Not officially a billion dollars, but you get the concept.
• 2:40
  Listen, that's a good amount of money for most creators.
• 2:43
  Yeah.
• 2:44
  I think that the hard part for creators, and I've thought about this a lot, and what Mark did is actually very interesting.
• 2:53
  And I find this slightly novel because a lot of creators are creatives first, and then they're business people second.
• 3:00
  And I actually think we're both of us were actually the opposite because I come from a background in SaaS also as do you.
• 3:07
  So you are business person, operator, build a business, understand it, understand the scale, growth, all of that.
• 3:13
  And then you're also a creator at the same time.
• 3:15
  But I think a lot of creators struggle with figuring out how to create enterprise value or to create something that they own.
• 3:22
  Because a lot of creators outside of, we're not talking like the Logan Pauls or the Mr.
• 3:27
  Beast.
• 3:27
  They just have such massive reach that, yeah, they sneeze out a product, people are going to know about it.
• 3:34
  But people that don't have reach like that and they want to start a product and they don't know how to build a business per se, they're not.
• 3:40
  So how come Mark was successful when how many creators launch merch lines or pick a product and it just seems to fizzle out and it just seems to be tired and then they kill it?
• 3:52
  Even, oh, who's that makeup artist?
• 3:55
  I'm going to blank on her name right now.
• 3:58
  Oh, my girlfriend's going to kill me.
• 3:59
  Anyways, there's a large makeup artist that just basically dropped her whole makeup line.
• 4:05
  But the point is, creators struggle building businesses.
• 4:08
  So how do they do that effectively?
• 4:10
  Or is it smarter for a creator to take equity in a company that has an operator, an entrepreneur that can actually build something out for them?
• 4:19
  Yeah, there's a few things in that.
• 4:20
  First, I think you have to know what your strengths are.
• 4:23
  Like if you're saying, hey, I am the creative through and through.
• 4:27
  That is what I'm best at.
• 4:28
  I can get attention, but I don't want to get involved in software development, supply chain, operations, finance, any of that.
• 4:36
  Then you should probably not get into those things just to chase money.
• 4:42
  So finding the operator is going to be really, really important.
• 4:45
  You know, in EOS, which is the Entrepreneur's Operating System, which is a popular framework that a lot of founders use, they have this idea of the integrator, right?
• 4:55
  Someone who takes your ideas as the visionary, you know, the spokesperson, all of that, and they're responsible for running the day-to-day operations.
• 5:04
  So I think at a minimum, creators are going to need a really great integrator, a COO, something like that.
• 5:11
  I think the creator should not shy away from those things.
• 5:14
  Like in the same way that you learn how to edit videos for YouTube, you can learn how to read a P&L and any of those other things.
• 5:21
  It's not just because there's some fancy certification that someone could get doesn't mean it's actually that hard.
• 5:27
  So I would, you know, encourage everyone to dive in on those topics.
• 5:30
  It'll make you, you know, much better at running a creator business.
• 5:34
  But I think, go ahead if you want to jump in.
• 5:37
  No, no, no, no, no, go ahead.
• 5:39
  I had another follow-up, but finish your thought.
• 5:42
  Yeah, in this business realm, I think that you should only pursue products on this level and scale if that's something that you're really, really interested in.
• 5:54
  I have seen this where people take an audience and say, hey, what should I shoehorn into this?
• 6:00
  And it's just not a good fit.
• 6:03
  Whereas you see the other angle of people testing things with their audience.
• 6:08
  So we mentioned Primal Kitchen.
• 6:12
  They had a recipe for avocado oil mayonnaise.
• 6:15
  They had salad dressing recipes.
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  They were very popular.
• 6:18
  There's another CPG company called Wellness that they had this.
• 6:25
  It was spun off of a blog called Wellness Mama that was very, very popular.
• 6:29
  And they had this like homemade, you know, natural products, toothpaste recipe that was very popular.
• 6:37
  And so then they basically started saying, oh, let's take this thing that's already popular and put it out there.
• 6:42
  A third would be, what is it?
• 6:47
  Kettle and fire.
• 6:48
  They make a bone broth.
• 6:50
  That was off of a very popular bone broth recipe, and they built a massive business off of it.
• 6:55
  So
• 6:56
  You're following this trend that there's already interest and excitement.
• 7:01
  Another example that I really like is Mark Rober, where with his YouTube channel, he has 40 million subscribers or something crazy like that.
• 7:10
  He didn't start out saying, hey, I'm going to make a subscription science box.
• 7:15
  He started out being sponsored by, you know, a monthly subscription box.
• 7:20
  And he is looking at how well does that work with my audience?
• 7:23
  You know, he formed a great partnership with them.
• 7:25
  And at some point, he's looking and going, wait, I could make something significantly better than this.
• 7:31
  And I don't know the details, but they probably had decent terms for him.
• 7:35
  But he's like, wait, I can not only make a better business, but I can integrate it better with the videos.
• 7:39
  I can sell it better.
• 7:40
  And then, you know, he's ended up making crutch laps, which I don't remember the numbers, but...
• 7:46
  I want to say it's pushing $100 million a year in revenue or something like that.
• 7:50
  The subscription numbers are absolutely wild.
• 7:52
  But it's because he's really looking for the early signs of product market fit instead of going out and saying, I have an audience.
• 7:59
  Let's throw some merch at it.
• 8:00
  Let's just try to fill in some of these things in that aren't really a sustainable business.
• 8:05
  I'm wondering if you've thought through this because I'm sure you have.
• 8:10
  With ConvertKit, I know you're rebranding it as Kit now, but...
• 8:13
  A lot of the audience knows it as ConvertKit.
• 8:16
  Did you have a strategy for preemptively finding product market fit or reverse engineering a product for an audience that you knew was going to be a hit?
• 8:27
  Or were there multiple iterations and failures and stresses?
• 8:30
  And I'm sure there were a lot of stresses along the way.
• 8:32
  But how seamless was that product when you chose to launch Kit from the ground up?
• 8:38
  And how did, like, talk me through your specific example of what you just suggested creators do.
• 8:44
  Because at the end of the day, what you just recommended creators do is just a smart entrepreneur idea.
• 8:50
  So my background's in software design.
• 8:52
  I've built a lot of iPhone apps.
• 8:54
  I've written books on iPhone and web app development.
• 8:57
  And that got me into the creator world.
• 9:00
  And so I didn't have an established audience and think, okay, what is interesting, let me do software and figure that out.
• 9:10
  Because that's a whole challenging thing, as you know from a lot of time spent in the software world.
• 9:17
  And so I was really a student of that in that business and that industry.
• 9:24
  So what I set out to do is really as I came into the creator industry,
• 9:29
  is I wanted to build a better email tool.
• 9:31
  I was using, at the time, this is 2012, I guess.
• 9:37
  Yeah.
• 9:38
  So 12 years ago, I'm looking at the email tools.
• 9:42
  The main ones out there were Aweber, MailChimp, and Infusionsoft.
• 9:46
  And basically, if you were a direct response marketer, you used Aweber.
• 9:50
  If you had just gotten lumped into this industry, you just started, it was probably MailChimp.
• 9:56
  And if you were like sophisticated, you used Infusionsoft.
• 10:00
  And so I was using MailChimp and I remember thinking like, this is not made for people like me.
• 10:06
  Like I learned all these best practices and then you had to hack it in.
• 10:08
  I was running custom code and I was doing all this stuff for fairly basic things.
• 10:12
  And so...
• 10:14
  I think a lot of businesses are born out of a pain point.
• 10:17
  And that's where ConvertKit was of...
• 10:20
  okay, this can be done better.
• 10:22
  I can build in the best practices by default for a specific audience.
• 10:26
  And so that was, you know, we started out email marketing for bloggers and then expanded into indie creators, but it was not an overnight success by any means.
• 10:36
  And we can get into that if you'd like.
• 10:38
  Thanks for tuning in.
• 10:39
  If you found this valuable, don't forget to hit that subscribe button so you never miss an episode.
• 10:44
  And if you want to dive deeper into this conversation, check out the links in the description to watch the full episode.
• 10:49
  See you in
• 10:50
  the next one.