Nathan Barry

ConvertKit: $28M ARR, raising secondary at 7x ($200M valuation)

Sam bought ConvertKit secondary at 7x ARR. The numbers founder Nathan Barry shared: $28M ARR, $27.3M net revenue up 34%, 3.8% revenue churn, 36,000 customers, ~11-12% profit - implying a ~$200M valuation. Dharmesh (HubSpot) sparked the round.

“we're putting together a secondary round at 7 times ARR. And we're looking to raise $2.5 million in total with $2.05— so $2 million already committed. ARR is $28 million. Net revenue is $27.3 million, which is up 34%. Revenue churn, 3.8%. Customers, 36,000. Profit this year, 11%, 12% profit.”

ConvertKit: $22M ARR, profit sharing allocated purely by tenure

Sam cites Nathan Barry's ConvertKit doing ~$22M/year in recurring revenue with radical transparency. Barry's published profit-sharing method allocates by tenure alone, ignoring salary or job title.

“ConvertKit is the name of his company. And he's one of these radical transparency type of guys. And he, so all of his company's revenue is on bare metrics and they do, I think, $22 million a year in recurring revenue. It's a really great company. And he revealed his profit sharing methodology.”

ConvertKit: ~$2M MRR, 100% founder-owned, no outside investors

Sam highlights Nathan Barry's ConvertKit (a Mailchimp competitor) doing close to $2M in monthly recurring revenue (~$24M/year), fully owned by the founder, which he pegs as a $100-200M company because locked-in email customers rarely switch.

“And Nathan has this company called ConvertKit. They do close to $2 million in monthly recurring revenue. So $24 million. He owns 100% of it. It's probably a $100 to $200 million company. Like, it's really valuable because once customers are locked in, it's basically a Mailchimp competitor.”

A $900K Boise Airbnb pulling $800-$1,000 a night in summer

Nathan Barry bought a 5-bedroom Boise house next to the BSU stadium for $900K. It locked in $8,000 for a slow January, with summer nights booking at $800-$1,000 each, before he even added a hot tub.

“it just did $8,000 for January locked in. Um, and then the summer bookings are coming in at like quite a bit higher. Like, so the January ones, you know, are last minute and Boise's slow there. But yeah, the summer ones are coming in at $800, $900, or $1,000 a night, which is wild. And we haven't even put a hot tub on it yet.”

Andrew Warner wired Nathan $25K as a no-interest safety blanket

ConvertKit was profitable but down to $10-12K in the bank with rising expenses. Andrew Warner, whom Nathan barely knew, pulled him aside after a Mixergy Scotch night and offered to wire $25,000 the next day as a no-strings insurance blanket.

“And he said, okay, here's what we're gonna do. I'm gonna wire you $25,000 tomorrow. You're going, if you need the money, spend it, do whatever you want with it. Whenever you feel right, like pay me back. Or if you don't need it, like just put it in a savings account. Like just let it be an insurance blanket for you.”

Andrew Warner wired Nathan $25K as a no-interest safety blanket

ConvertKit was profitable but down to $10-12K in the bank with rising expenses. Andrew Warner, whom Nathan barely knew, pulled him aside after a Mixergy Scotch night and offered to wire $25,000 the next day as a no-strings insurance blanket.

“And he said, okay, here's what we're gonna do. I'm gonna wire you $25,000 tomorrow. You're going, if you need the money, spend it, do whatever you want with it. Whenever you feel right, like pay me back. Or if you don't need it, like just put it in a savings account. Like just let it be an insurance blanket for you.”

Push annual plans on Black Friday to pull cash forward in SaaS

When a SaaS company is cash-strapped, the move is to push annual plans to bring future revenue forward. ConvertKit did this every Black Friday, which compounds into a giant November spike as renewals stack up year after year.

“the thing that you do in SaaS is you push annual plans. Right? Because you have this cash flow problem. And so we started pushing annual plans as part of our Black Friday sale, you know, to bring forward a bunch of that cash. And so we kind of just kept doing that.”

Steal thisWhen cash is tight, run an annual-plan promo to pull next year's revenue into this month.

Ryan Reynolds chose equity over ad checks

Barry uses Ryan Reynolds as the model billion-dollar creator: instead of taking $1M–$10M to shill other people's products, he bought Mint Mobile and Aviation Gin to be his own spokesperson and own the equity.

“And at some point he goes like, forget that, I'm going to buy my own companies with Mint Mobile and Aviation Gin. And I'm going to be my own spokesperson. So I don't get cash, I get equity.”

A $100 paid newsletter sharing your full net worth and money moves

Nathan runs a private newsletter where he shares his entire net worth, stock holdings, and angel investments. He charges $100 mainly as a filter to weed out people who'd accuse him of bragging, covering the post-$250K money questions nobody talks about publicly.

“And so I was like, okay, I'm gonna make a private newsletter and I just charge people $100, like just to filter out the, anyone who's gonna complain about it, I guess, or say that I'm bragging. And then just say, I'm gonna write about all the stuff that I wish I knew when I made like my first $250 grand online.”

Steal thisCharge a small fee on a transparency newsletter purely to filter out bad-faith readers.

Mark Sisson sold Primal Kitchen to Kraft for $200M off a 100k-subscriber blog

Nathan Barry notes Mark's Daily Apple had only ~100,000 subscribers when Mark Sisson launched Primal Kitchen, which he later sold to Kraft for $200 million — and he still kept the audience that kickstarted it.

“But yeah, then he sold, sells it to Kraft for $200 million. You can't sell a blog to, like a blog doesn't sell for $200 million, you know?”

The Billion Dollar Creator: sell your own product, not your attention

The most profitable thing a creator can do is point their attention at their own product where they build equity, not sell sponsorships. Jessica Alba (Honest Company) and Ryan Reynolds (Mint Mobile, Aviation Gin) made far more as owner-spokespeople than from cash deals.

“the most profitable thing to do is to create your own product and to drive that attention to something where you actually build equity long term. So it's like a longer article talking about that. But like the richest movie stars, you know, like take Jessica Alba, for example, right? She has made a lot of money from movies. But the bulk of her wealth is from starting a company using, you know, being the spokesperson for her own company.”

Steal thisPoint your audience at a product you own equity in, not at someone else's sponsorship.

Mark Sisson sold Primal Kitchen to Kraft for $200M and kept his audience

Mark Sisson's paleo blog Mark's Daily Apple could make ~$1M/year but a blog never sells for big money. He used it to launch Primal Kitchen condiments, sold the brand to Kraft for $200M, and still owns the audience to launch his next thing.

“then he sold, sells it to Kraft for $200 million. You can't sell a blog to, like, a blog doesn't sell for $200 million, you know, uh, like all of these things. And the crazy thing is he still owns the audience, right? The thing that, that kickstarted this whole product, he still owns. He can sell off the, that whole brand.”

Sell products, not attention (the NASCAR-logo trap)

Rule two of the billion-dollar creator: everyone expects you to sell attention (the NASCAR-logos-on-the-car model). The wealthiest creators refuse and promote their own product instead, where the real wealth is built.

“the wealthiest people are the ones who are like, great, I'm going to not do that. I'm going to promote my own product. Connor is the extreme example of like, I'm going to do 10 of these or something. Most people are like, let me do 1 or 2. But that's where you're going to build this real wealth.”

Steal thisStop renting your audience to advertisers; build one product you own and promote that.

Trade low-quality revenue for high-quality revenue (Andrew Wilkinson)

Andrew Wilkinson uses MetaLab's cash-rich but low-multiple agency revenue to buy or build software companies with recurring, high-multiple revenue. The same product (e.g. OptinMonster) rebuilt as SaaS rather than a WordPress plugin earns Silicon Valley valuations.

“And so he's like, okay, I'm gonna take low to medium quality revenue and use it to go buy really high quality revenue. Because agencies, they're not as recurring, they're not high multiple if you want to sell the business. So he's like, great, I'm going to go buy software companies or start software companies. And so I'm going to trade in one set of revenue for another.”

Steal thisUse cash-rich, low-multiple revenue to fund recurring, high-multiple revenue.

The 3 tests of a productized service

A productized service has three traits: the purchase happens without a sales conversation, it's pre-packaged so the buyer knows exactly what they get, and time and money are disconnected so you can scale or hire without working more hours.

“One, the purchase is being made without me talking to you. Like if I'm charging $100 an hour, we'll probably have a conversation. You're like, we're planning that. Second thing is it's pre-packaged. So you know exactly what you're buying. And then the third thing is that the time and money are totally disconnected.”

Steal thisTurn a service into a fixed-price, self-serve package so you stop trading hours for dollars.

Strip malls vs skyscrapers: pour everything into one thing

Nathan's mental model for builders: a 'strip mall' creator expands horizontally, adding ebook, membership, and other products that each make a little. The 'skyscraper' approach pours everything into one thing and keeps building it taller. ConvertKit is his skyscraper.

“My approach on everything is the skyscraper model of like, I'm going to do one thing and I'm going to keep pouring everything into that and just keep going taller and taller and taller and make some. And so like ConvertKit is my attempt at a skyscraper.”

Steal thisPick one product and keep stacking on it rather than launching ten parallel things.

Pair a weak business model with a second product to fix it

A standalone Gumroad-style commerce product is a poor business (tiny cut of cheap PDFs). ConvertKit Commerce works because pairing it with the email subscription means customers don't feel they pay extra, and sellers getting paid through the platform churn far less.

“So I'd argue that like Gumroad by itself, or, you know, the Gumroad competitor that I wanted to start by itself, you're right, it's not that good of a business model. But when you pair it with ConvertKit and make the creator marketing platform, this is turning into a sales pitch, but you get the idea that I'm trying to make of it's that like the combination of those two things that then makes it a fantastic business model.”

Steal thisWhen a business model is weak, pair it with a second product that fixes its churn or margins.