How Nathan Barry Conquered Failure To Launch ConvertKit

How Nathan Barry Conquered Failure To Launch ConvertKit

ConvertKit hit $29M Revenue with 36K customers in 2022 - but did you know it was preceded by more than 5 failed first ventures?

Nathan Barry believes in just three mantras.

Teach everything you know, create every day, and work in public.

What he didn’t add was fail, and fail often.

But did you know he failed at 9 businesses before he launched ConvertKit to $29M in Revenue with 36K customers?

Here they are in all their glory, along with what you can learn from each of them:

Nathan Barry’s First Ventures To Last (For Now)

  1. Shoestring - a WordPress-based hosting company that would allow multiple users to set up websites for people on a shoestring budget. It never earned any revenue but gave him critical insights into WordPress and the blogging world. This became crucial to his success later down the line, proving your first venture is the first ladder rung that all others are connected to.
  1. Shop208 - a Clutch-like review and rating platform targeted at local businesses in Boise, Idaho. Users would be able to follow companies, review them, read updates, and more. Built from that trusty WordPress knowledge, it garnered around 200 users but no revenue, causing him to move on to his next big idea.
  1. OneMotion - A web-based app made for sign language interpreting organizations. Hired to build a custom app for $10,000, it only ever had a few clients but managed to generate around $300 a month in revenue thereafter. Nathan knew that WordPress was the domain he knew best, so why not launch something else there?
  1. Legend Themes - another spin-off based on his WordPress knowledge, Nathan started building themes to sell but found that it was difficult to gain traction in comparison to his competitors. Revenue achieved? Just $70, despite it being 2009 and a peak time to sell themes. What was missing here was marketing knowledge.
  1. OneVoice - his first app to launch on the iOS platform. Aimed at non-verbal children on the Autism spectrum, it was built during a hackathon and helped Nathan to achieve his first real success. The app earned him over $50,000 in the next four years while also meeting a genuine pain point for its users.
  1. Fluent - building on his previous iOS success, Nathan developed Fluent, an application that had delayed repetition flashcards to help you learn phrases in different languages. It didn’t get much traction but taught him essential lessons about development for the iOS mobile operating system.
  1. Commit - at this point, Nathan was spending a lot of his time writing as he developed his various ventures. So he built himself a habit-tracking application called Commit, used to keep up his 600-day writing streak. It was one of the first of his apps that he seriously marketed, it landed some publications and this resulted in revenue of over $20,000.
  1. iOS Design Weekly - his first email newsletter and the one that sparked it all. It never earned any revenue but did garner over 1000 subscribers before he decided to pivot…
  1. The App Design Handbook - the product that put his name on the map officially. Nathan wrote the handbook and learned tons from the launch process. This meant that he could leverage his previous knowledge to make a living as a content creator. He shared this journey publicly, found a platform, and has now earned more than $90,000 from this venture.
  1. Designing Web Apps - from the success of his first book came the success of his second. The launch was twice as big and continues to sell well today, earning him over $200,000 and continuing to inform new entrepreneurs and designers alike.
  1. ConvertKit - the long-awaited unicorn. Used by millions of people, ConvertKit is a powerful email marketing tool that has earned more than $84 million. A full-featured email service provider, this offering has become one of the fastest-growing email marketing companies in the world.

Lessons Learned From Nine Failed Ventures And One Unicorn

You can see the ability to fail and fail often is key to the success Nathan has achieved today. Being willing to launch venture after venture, knowing he just needed one to land, is a characteristic that other venture builders and entrepreneurs can learn from in their own journeys.

This drive came from two things: wanting to quit his job and work online, and wanting to form relationships with new people.

Holding on to these values meant that he was able to stay the course project after project without giving up on his dreams.

Another interesting thing about Nathan is that he had even more success with his blogs about writing his books than he did with his actual books. While they did net a positive return, people were more interested in his process than they were in the end result.

And with that, he had hit the jackpot. He had found a winning, unicorn recipe that would allow him to fulfill both of his set goals - working from home and connecting with now millions of people. 

Whatever Happened Next?

Building in public is what Nathan’s audience wanted. They wanted to learn how they could replicate his success, making his platform even more prominent online. In 2021, ConvertKit had drawn the attention of Spotify which offered an acquisition of millions of dollars.

Instead of accepting off the bat, Nathan did this instead. Software companies are valued on annual recurring revenue so on paper ConvertKit’s value was increasing by $2-3 million per month. His net worth as the owner was climbing astronomically, but something didn’t sit right - the team who built ConvertKit with him wasn’t sharing in that value.

So when Spotify came knocking and he said no, some of the team weren’t stoked to miss out on life-changing funds.

To get them a return he needed to come up with a new plan.

Over the next few years, they used a small fund to buy back shares from a couple of team members who wanted to sell. 

The team loved having direct ownership of ConvertKit and the result is they did a second funding round with 48 individual investors who are long-time friends and advocates for ConvertKit. 

They bought 3.18% of ConvertKit at a $200 million valuation. 

25 team members were able to sell shares for house down payments, pay off debt, and diversify their streams of income.

Meaning no one lost out on anything even though they didn’t get acquired by Spotify.

Key Takeaways From Nathan Barry

Nathan talks about his three mantras that hang in his office, but I think there are two more that he should add to his wall: have the courage to fail often and never let your team down. 

These principles known and unknown, together with his drive as an entrepreneur, are ultimately what helped him to launch a unicorn company that is still in his ownership and actively growing. 

Every venture he started gave him essential knowledge and insights into what would and wouldn’t work in the next. This type of learning is the most important to entrepreneurship, and the one that all of us try to replicate in our own ventures. What his journey ultimately shows is that the grit and drive to succeed at your goals should outweigh your fear of failure and encourage you to try and try again instead.

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