095: How Nathan Barry Created ConvertKit, An Email Service Made For Bloggers

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Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here is your host Steve Chou.

Steve: Welcome to the My Wife Quit Her Job Podcast, today I’m thrilled to have Nathan Barry on the show. Now if you’ve never heard of Nathan he is the owner of nathanbarry.com, and he is actually well known of many things. So first off Nathan is the author of the App design handbook, a book where he made $12,000 on his first day with an email list of 100,000 people. He’s also written a book called Authority, and he has created a bunch of iphone Apps which include OneVoice, Fluent, and Commit, but the reason I have Nathan on the show today is to actually talk about his latest project ConvertKit. Now ConvertKit is an email marketing platform designed specifically with bloggers in mind.

And if you’ve listened to my podcast for a while now I have had then founders of AWeber and Klaviyo on the show already which their email marketing they are specifically cater to different niches. But there’s a whole lot of innovation in the email marketing space and ConvertKit aims to target bloggers and those with digital products. So today we are going to explore the challenges of email marketing from a blogging perspective, and how Nathan came up with the idea for ConvertKit. And with that welcome to the show Nathan how are you doing today man?

Nathan: I’m doing well, thanks for having me.

Steve: Yes, so tell me about ConvertKit and how you came up with the idea and kind of the back story. And I know you were doing really well with books, eBooks before ConvertKit,4 so I was just wondering and I understand you kind of pose that side of business to go on ConvertKit, I just want to know — well there’s a lot of money that you left behind and kind of what all the psychological factors were involved.

Nathan: Yeah, so that’s a big question, there’s a blog post there I’m going to write at some point, and it’s basically read how I left a quarter million dollars on the table this year by ignoring my blog and training business. Because yeah, I did that right, I built up a blog to the point where it was consistently pulling in $250,000 a year. And certainly I could have grown that much more and the folks at ConvertKit. So I’ll tell you why I went — why I built ConvertKit in the first place, and that’s really because I got into the blogging world, I always wanted to be a famous blogger, internet famous blogger I guess.

And I learned that you can build an audience and you could make money through running eBooks, and so I wrote the App design handbook. And my goal was to make $10,000 over the lifetime of the book and I just started — I had no audience really when I started writing the book. But I just started writing a blog post, getting people to sign up for my email list, and all this is when I launched I had 800 people on the list, and did $12,000 in the first day.

So I learned two things from that, one email is amazingly powerful for driving sales and get to meet with your audience. And two this whole online business thing is pretty cool, and you can make a living out of it. And because I blue passed all like my lifetime goals for that book in revenue, because I…

Steve: How much did it generate in total do you know, so for the first one…?

Nathan: That one book is well over six figures.

Steve: Crazy okay.

Nathan: Yeah, so and that was off from a relatively small email list and then I would go and talk to other friends who were far more experienced, like hey guys — this email thing is amazing, like it’s driving — did you know that it converts like ten times better than social? And they are, aha we’ve known that since 2002. I was brand new to it, but I went on to writing another book designing web applications because my whole background is building software.

And I launched it to a now bigger audience, it did double the revenue, that book did 25,000 in the first day. It created 50,000 by the end of the first month. But there’s a thing where I learned that email was so amazing and so powerful, and I learned all these best practices. Like if you want to grow your list quickly you should give away, I think everyone calls it lead magnets or an incentive of some kind.

Steve: Right.

Nathan: Or like email courses, or follow up sequence are really powerful for getting people to come back and buy, you should automate that. If you give away a sample chapter on your sales page you should remind them over time to come back and purchase. But it was such a pain to set that up in MailChimp. Like I knew that that the autoresponder follow up sequence would make me a bunch of money, but I didn’t set it out because it was just too frustrating to use interface and to go through that. And then with the — to avoid different incentives you had to create a bunch of different lists, and then you end up with two different subscribers and it was just such a pain.

And then I also wanted to know like the conversation rates for my opt-in forms. And in order to know that I had to either use an outside plug-in, or go calculate it with Google analytics. And I thought okay, there’s always best practices, what if I built a tool that had all of them built in by default, specifically for people who are trying to grow big audience and then sell books and courses to them? So I ended up being bloggers, so that started me down I went — I guess it’s been two and half years now the journey of building ConvertKit.

Steve: So did you build this for yourself in the beginning, and then decide to put it out to a broader audience?

Nathan: I did build it for myself, I was customer number one, but the goal was always to sell it.

Steve: Okay, and you are quite a technical guy and a software programmer, did you kind of bootstrap ConvertKit and coded it up yourself in the beginning?

Nathan: I didn’t code it myself, so my background is in user experience and design. So I do a lot of programming, I program bunch of iphone Apps; I have built many hundreds of websites over the years. But I don’t trust myself to architect large applications and systems and I know the ones that are inability. So I knew from the beginning that I was going to hire out development, and bring out developers to help with that.

But I also knew — I had seen a bunch of other people have some successful product to a company, they gave them a bunch of money, and then when they go into something knew they just take like $50,000 or something from that, and say let’s build this out and that money allowed them to wait a long time before they had to sell. And they could perfect this product really before even having to go out to the market and see if it’s something people wanted to buy. And I just had this pile of cash because — like when I started ConvertKit, I had made $50,000 in the last 30 days.

Steve: With the book?

Nathan: With the book.

Steve: Okay, I got it.

Nathan: So I had all this money and I thought, well just pour it all into ConvertKit, but then I thought, okay what if I build something that people don’t want? And it would have cost me $50,000 to learn that, that would really suck. So instead I gave myself a budget of $5,000 plus a bunch of my own time. And the other requirement was that I had to come up with all the extra capital that I needed from pre sales. So that forced me from day one like the very first day of working on ConvertKit, I sketched the wire frames, and then I picked up the phone. And I just talked to 10 people and pre-sold it.

Steve: So you had nothing and then you pre-sold ConvertKit?

Nathan: Yeah, absolutely.

Steve: Interesting, so walk me through that, convince me like how would you have pitched me, are these your friends or?

Nathan: Yeah, friends or I would say like acquaintances in the blogging world. I just kind of I guess broken onto the scene and so people knew who I was, and so they– and that sounds like oh yeah, he wrote this blog post about how his books did, it was that sort of thing. So what I did is I just wrote out once to people who I thought might have similar problems to me. And then I just called them and said hey, I’m thinking of working on this product and instead of pitching them I just asked them like, do you have this problem? Or what frustrates you about your email marketing? And then I get more things added to that list.

And then as we talked through it they would usually come to the same problems that I did, and then I would say well is that something that you would pay, would you buy a product and solve that problem? In all cases the answer is yes absolutely. So I said well, how much would pay for it? And the answers that I got ranged from $50 a month up to $200, and really the only difference here was how big people’s list were.

Steve: That of course yes.

Nathan: Because that determine how much value they are going to get out of it.

Steve: So did they give you money upfront then?

Nathan: That’s a very good point. No they did not and that was — I think I was doing everything right in the process up until that point. So what I did I said, I got to — how much would you pay for it? And they said a number, and so like we have everything ready in this transaction except for actually exchanging money. And I thought that’s not important because they’ve said that they are going to pre-order it.

So then what I did is I said great I don’t have a way for you to pre-order it yet, to process your credit, so I’m going to go away and I’m going to work on this some more, talk to some more people and then we’ll talk soon. Then like a month later I had refined wireframes with further along, I said all right I’m ready to process payments. Actually what I ended up doing is just setting up a quick page in Gumroad to take the…

Steve: In Gumroad, interesting okay.

Nathan: Because that’s where it would be easy to sell all of my books, so…

Steve: Right but for an ongoing recurring payment thing I would think that Gumroad wouldn’t be as good, right?

Nathan: You are right and so later on we ended up using Stripe, but I didn’t need to collect ongoing payments; I just needed to collect money. So what I did is I said basically people would be pre-paying for three months off the tool. If we are doing it over again I might do a year just to get…

Steve: Was the tool — it was usable?

Nathan: No it was not.

Steve: Oh it was not usable.

Nathan: I was able to– we had development markups and we were working out of it really quickly, but they wouldn’t get access to it for a couple more months. So I went back to these people and I said okay, great, we made this progress, now you can pay with the money that I thought you committed to. And every single one of them didn’t end up pre-ordering. And the interesting thing that happened is the conversation was different that time.

Once they were about to hand over their credit card it changed from like a hypothetical of like would you buy this, this is interesting like, yeah, that sounds great, yeah it definitely solves a problem, to handing over money then it turns it like your brain switches from the hypothetical to the I guess rational, and says, okay well our existing tools there’s do you have this feature. And it starts getting through all the real objections that you actually want the first time around.

Steve: Right.

Nathan: So my mistake was just the first — in the first conversation I just needed to push time it further and have a way to process credit cards right then and just say, okay, great would you pay — like the amount of money doesn’t even matter. It could be 100 bucks, it could be five bucks. But it’s the difference between okay, now you are actually making purchase rather than like giving some random advice to some friend. So those people who didn’t pre-order a couple of them are actually customers now though. Then I went out to a broader audience, I have been blogging about this and all that and talked to more people and ended up getting about I think 25 pre-orders.

Steve: Pre-orders with cash you mean, right?

Nathan: Yes, with actual money and that came to about $5,000.

Steve: It’s interesting like how did you convince these people, so let’s say they are on their existing email platforms and here you are offering something that wasn’t usable yet, and yet you got people to pay you for it.

Nathan: I think it was– they had the problem and they saw the vision, and they knew it was something that they would be able to use once it was ready. And then they definitely trusted me, I think being open about the whole process and putting out a lot of content in blog posts and all of that helped a lot.

Steve: Okay, so these were avert followers of you because they had read your blog and so they trusted that you would deliver?

Nathan: Yeah.

Steve: Okay, got it.

Nathan: At this point I have been blogging for I don’t know not even a year though, so it’s not like I built up a huge following.

Steve: But clearly if you’d sold all those books, those people know you from that and they trust you, right?

Nathan: Exactly.

Steve: Okay, so you put in 5000 of your money, and then you said you just raised 5,000 from pre-orders, right? And is that enough to hire a developer to start working on this?

Nathan: Yeah, it is. Now I basically saved 50% of the money that I would have spent at least because I did all the design and [inaudible 00:14:48] codes, so I read all the issue on CSS design the user experience.

Steve: Okay, so you just needed a back end person to connect all — okay.

Nathan: Yeah exactly, and then once we launched we started getting paying customers. So we basically launched with those pre-orders and everything to about $1,000 a month in revenue. So we were working on this really so they– spending that last amount of cash that we still had built up. And then it got to the point pretty quickly where we were just every penny that I made was going back into development. And that was pretty much the biggest [inaudible 00:15:24] in the cost.

Steve: Can you comment on how you got your first few customers again, was it just emailing out to your list?

Nathan: Yeah, emailing out to the list and then…

Steve: Through ConvertKit, or through a different service at the time?

Nathan: I did it through MailChimp.

Steve: Oh, okay.

Nathan: Yeah and there was actually…

Steve: That’s kind of ironic.

Nathan: Yes, it was probably four months into ConvertKit that I actually switched my whole list over to ConvertKit, four or five months. Because that was my whole business that was how I made money. But it was also I guess a good selling point for ConvertKit, and I was like hey, this blog that makes a bunch of money — like I actually use ConvertKit for it. Because people would wonder like, okay it’s brand new, is it usable.

Steve: Yes, that would be my first question.

Nathan: So then when I could say, yes, I don’t know how many subscribers at the time, like 7000 or something like that. I would say yes, I’m doing all my emailing for 7000 subscribers on this, and it’s driving I don’t know $15,000 a month in revenue for my books and courses. So that was some good validation and I wasn’t some total random person who didn’t know the industry and…

Steve: So how did you get your remaining customers like early on, like what were some of the challenges early on in getting new customers? Was it just primarily a list in your blog driving customers in?

Nathan: Yeah, and then that was not nearly enough. And I tried other blogging, other content marketing things, and it just didn’t work. And then we tried other things like we launched something and this is a bit later on called ConvertKit academy. And that’s where we added this whole training component. And about helping people build a blog, get to their first 100 subscribers and doing that on ConvertKit.

Steve: I see, yeah.

Nathan: And that worked well enough that in the short time I definitely considered it a success. The thing was that it got us a whole bunch of beginner customers. And these were people who wanted to build a blog, but if you are in that position you haven’t been writing blog posts for a year. And if your initial stuff doesn’t get traction, so many people just kind of loose interest and all that. So our biggest cancelation reason was people just saying out yeah I don’t know if this blogging makes for me, or basically building an audience is more work than I thought, or ConvertKit is too expensive, and so that ultimately was a failure.

Steve: That’s why MailChimp gets so many customers right, because they have that free option?

Nathan: Yeah.

Steve: Right.

Nathan: Exactly.

Steve: So how did you overcome that then, did you start going after bigger names or?

Nathan: Yes, so there was kind of a long time period in here where I had the book and course side of my business that was doing really well. I could do a launch and make $30,000 in a day and $50,000 in a couple — over a week. So I had that side of things and so that was going really well, and then the ConvertKit side just getting another $100 in monthly recurring revenue was so much work.

So like when you balance these two things, you look at it you are like, yeah, ConvertKit would be better long term, but it’s so hard to focus on something that’s not working when you have something else that’s working so well. So ConvertKit kind of just — I guess limped along for a while. And had gotten to about $2,000 in monthly recurring revenue and stayed there. And it was just — it was a side project.

And then it got to basically September or October 2014 is just last year. A friend did call me out on — actually Heathen Shaw from Kissmetrics, Crazy Egg, a bunch of great stuff. He called me out on a couple of months earlier and he just said, hey when are you going to admit that ConvertKit was a failure and shut it down? Or give it the attention and money that it deserves and build it into a real company.

And that was kind of what I needed to hear because — wait, because he went on to say like it would have better if it had been a complete failure, because then you would have admitted it by now and moved on to build something else that would be great. So realizing that I’m like okay there’s $2,000 a month in revenue is not a tiny success, it’s actually a failure. So then instead of shutting it down I thought long and hard about, like have I given ConvertKit my best focus, have I given it every chance possible to be successful?

And the answer is no, and so in October I started working on it full time, the revenue was at $1,300 a month then. And I decided instead of hiring outsource development, that sort of thing, I wanted to bring on someone really good, so — being from the software world and working with — I had a bunch of startups; I knew a lot of developers.

So I made a list of all developers I would want to work with and then organized it by topics, and actually started recruiting. So treating not like a side project or like what someone might do when they are just trying to spend five grand to build the world’s best plug-in or something like that, but like if you wanted to build a company who do you want running the technology side. And I ended — go ahead.

Steve: No I was just going to ask presumably your incoming revenue was not enough to pay these guys in the beginning right, so you had to put more money in right?

Nathan: Right, and so I brought on David Weather [ph] as my lead developer, he was the number one person that went on my list. He said no the first time, but gave time fir [inaudible 00:21:26], and I invested $50,000 into ConvertKit, so the total invested up to 55,000, and that…

Steve: So you invested two week’s worth of income into ConvertKit?

Nathan: Yeah well, two weeks from the launch.

Steve: From the launch yeah.

Nathan: I think at that time let’s see, I was averaging — let’s see, the numbers are on my blog, but like 250, I made 250,000 in revenue that year.

Steve: Okay.

Nathan: So I guess you can average that out to whatever.

Steve: So if you were to do it all over again just curious would you have started out by investing all that upfront money, or would you have proceeded the same way kind of little by little and getting a lot of feedback?

Nathan: I would have proceeded the same way by being cautions with the money upfront and make sure — I would have hit sales and pre-orders way harder. But then I also would have had cash on hand, and I would have invested it sooner. Like I would have given the company a little bit of money and say okay, let’s make it work with this and then once it started to work I would have given it a bunch more money.

Steve: Okay.

Nathan: But I wouldn’t– like I really encourage people against like when you don’t know what you are doing and you get all this money and you are just going to waste it. So you have to be really-really careful with that, and that’s like if you go raise a million bucks in bunch of capital, you are probably going to waste all of it because you have no clue what you are doing.

Steve: So getting outside funding did not even crush your mind right in this case?

Nathan: I mean it did a few times, but I always had the ability to go and be my own angel investor I guess.

Steve: Okay, great because you had this other source of income that was kind of funding your development so to speak.

Nathan: So the other big change that I made in October last year is that I stopped working on the books and courses entirely. And the reason that was significant was because like I just had to make that decision to stop chasing the easy money. Because I knew that that was never going to turn into a big company, but ConvertKit could. All these other email marketing companies like I’m sure like here now we can name 20 email marketing companies that do over a million dollars in revenue a year.

Steve: For sure yeah.

Nathan: Many that are worth billions of dollars, and so there’s a ton of opportunity there but I was never going to make it happen if I was constantly like yeah. I’ll put 30% of my effort in ConvertKit, but the other 70% is going to the blog and courses because that’s where the money is right now. So I had to give up that short term revenue because I don’t know maybe someone else could pull off running both at the same time, I actually tried, and I couldn’t do it.

Steve: So just curious you had this tool that you released early on and it probably had a few bugs here and there, is there anything you do specifically to kind of reduce churn?

Nathan: Well churn was super high.

Steve: Okay, in the beginning okay?

Nathan: Yeah, you are looking at like 25% a month…

Steve: Oh, wow, okay, how did you address that later on?

Nathan: You just keep making the product better; it’s one of the things where the first many versions of your software suck. You really have two options, you either wait so long to release that you’ve run out of money and your software doesn’t get exposed to customers and feedback and all that which is terrible. Because you are going to end up building the wrong thing, and maybe you super polish which is going to be the wrong thing.

Or you go the other route and you say hey, we have this thing it’s the very first version, but we are making it better every single day. There are going to be bugs, there are going to be issues, there’s features missing. But it’s out there, we are making it better every day, and that’s the route that you want to go because then people use it and they go hey this part, I love the concept of this, fix these three things, and that part would be useful to me.

And you just keep improving all the time and that’s what we did. But there will be people who will say, I would love to use it, but I tried it and I just have to have these three features in MailChimp. And it’s like and I would tell them I would love to build that, I just don’t have the time or money right now, so it get pushed further off.

Steve: I see, well, let’s switch gears a little bit and talk about some of these needs of the customers that you have. And remember when we were just talking there’s a whole bunch of different email marketing companies out there. So what specifically makes ConvertKit stand out, and what are some of the needs specifically for bloggers and that sort of thing that you kind of directly address?

Nathan: Yeah, so a lot of those initial needs that I had, the first one being that you want to have a subscriber centric system rather than list centric. In both MailChimp and AWeber it’s the same — say you have a customer list and a newsletter list. If the same person is on both they are treated as two separate people. Whereas in ConvertKit and InfusionSoft and others they are subscriber centric, so then those are just more attributes added to that one subscriber’s profile. So that’s really important when it comes to doing any kind of automation or anything sophisticated there.

The next would be being able to easily create optin forms and give away those incentives and have good analytics and track and see what’s working. Then also so that it doesn’t end up creating like in MailChimp you would create the same person, have a bunch of different lists and get traction with difficult subscribers, and it’s just kind of a mess.

Steve: Give me an example of making an opt-in form easily; because I already kind of think that the process is pretty easier on some of the competing platforms. Can you give me an example?

Nathan: So like there’s a bunch of other tools — well, take like lead boxes, that LeadPages has. So that’s functionality that we built into ConvertKit directly. When you sign up you give out – it’s going to send out the incentive, the PDF, the video course, or whatever directly to you. So everyone is doing that outside of their email tool they are doing it with LeadPages, and then that solves — they came out with that right around the same time that we were working on ConvertKit to solve the exact same issue.

Steve: So let me get this straight, so I click on something, a box pops up, and I pop in my email and then you automatically send some sort of free giveaway, is that what you are talking about?

Nathan: Yeah, and then when you click on that giveaway we confirm your email address behind the scenes. So we don’t have to do stuff like well like in MailChimp it’s going to email it out and they are — like their email list is basically like hey, I know you signed up for Steve’s list, but do you really-really-really want to sign up? Like just make sure that you really want to sign up before I [inaudible 00:28:30] like, it’s just as really weird user experience where it’s like — it’s trying to prevent you from signing up almost. And MailChimp doesn’t let you customize those emails and that’s just weird to me.

Steve: Let’s talk about that for a little bit, so is ConvertKit double opt-in then in that respect?

Nathan: Yeah, so you can do single opt-in or double opt-in and, but you can customize that email. So you could do single optin if you wanted and auto confirm everybody, but then you get the benefits of when they click that confirmation button, it could say like download your free PDF. And when they click that it’s going to do the confirmation behind the scenes so we add to their profile and say oh, yeah, they own that email address which is the point of double opt-in.

Steve: Right.

Nathan: So we marked that behind scenes and they just get taken seamlessly to the thank you page or the file they requested or the video course or whatever.

Steve: I see so instead of a dedicated double optin email that’s kind of generic like the ones they force you to use; you can write a custom one that’s kind of related to your give away?

Nathan: Yeah, exactly.

Steve: Okay.

Nathan: So it’s not like in your face thing where you are — people are like well, I really wanted that PDF, and it’s like you have to confirm your subscription and then we’ll send you another email with the incentive. We can combine and my whole thing is user experience and I want all the subscribers to have a great experience, and I want it to be customizable for each blogger, and yeah. So I just saw a better way to do it, we can accomplish the same goal all behind the scenes.

Steve: Okay and so that is just something that’s already built in ConvertKit, so this isn’t like an auto responder sequence, this is kind of like the double and opt-in email and giveaway?

Nathan: Yeah.

Steve: Right okay.

Nathan: Yup, and then also on the auto responder side the designer and me knew that that could be done better. Everyone’s running sequences, but then just the interface on all this is a total pain, and so I knew that I could design it where you may have an email course and all the emails are listed down the left side and you will click between them easily, you can click back and see hey where did I send in that previous email. You can write it as an actual sequence instead of you know– other interfaces encourage you to send, well it’s effectively 10 random emails that just happen to come in a sequence because people don’t write them that way.

Steve: I am just curious; do you know what each person has gotten at any given time with an auto responder sequence?

Nathan: Yeah, so if you click in to each subscriber profile you would see what emails they’ve received.

Steve: Okay, and what are some other features that you built in just as being a user, or what are some of the other– because I’m just thinking like often time I had there’s like 10 email different email marketing firms. How do you kind of differentiate yourself from the competition, how do hammer home these differentiating factors to your potential customers?

Nathan: Yeah the biggest thing that we say is coming from the blogging world we know exactly what bloggers need. It’s build for bloggers by a blogger, and so a couple of other examples would be on a blog everyone, anyone who knows the power of email is doing all the work possible to capture email subscribers. That means that they’ll probably have a couple of opt-in forms on their site, maybe a side bar, a footer and an exit intent or something like that.

What happens is you’re putting all this work and you’re getting subscribers, and then someone subscribes and they come back and they read your blog because they are a fan, and your still– you have all these calls to action for an action they’ve already taken. There are ways to code around that, but nobody does it. No one sets up to the individual tracking so that their side bar opt-in form checks to see if it’s already– if that person visiting is already a subscriber and shows ultimate content.

And so we just built that in to ConvertKit, so that like if you’re reading my blog and you’ve already subscribed, then instead of the footer like at the end of the post saying subscribe, it’s going to show you a picture from one of my books just because like that’s waste of real estate, that’s a waste to call to action if when you’re telling your subscriber to subscribe.

Steve: Interesting, so is that tracking done if they’ve clicked on an email to get to your site, or is there just some cookie that’s on their computer to indicate that they’re an existing subscriber?

Nathan: Right now we’re doing it with the cookie, and so when they sign up we’re tracking a cookie that never expires.

Steve: Okay.

Nathan: Then we’ll make it a little more robust over time, but as long as this was like because we run this whole platform with hundreds of bloggers using it, we can do this work once and everybody benefits from it.

Steve: Right, yeah that’s pretty compelling, yeah someone’s already on my list, I might want to show them like a link to one of my products for example as opposed to just a sign up form.

Nathan: Yeah.

Steve: Okay, and just curious do you have any stats on how that’s improved sales for any of your customers or?

Nathan: We don’t have any hard stats. There is one that we run some tests on, they had a pretty big list see, I think they were around 40,000 email subscribers and pretty decent traffic. all we did was track a specific coupon code for basically that link to their course, and it drove– I’m trying to remember it was like an extra 40 to 50 sales at about 100 to $200 I think it’s what the course is priced at.

Steve: Okay.

Nathan: So it’s one of those things where they paid us a couple of $1000 a year for ConvertKit for all of their email marketing, and that one feature made them over 10 grand.

Steve: Okay. Let’s talk a little bit about just general email practices. What are some of your main strategies or tips for growing an email list fast?

Nathan: Well so it depends on what stage people are at. A lot of people get stuck on the like just getting started, and so for that I like to take people through what I call the 10 person rule, and that’s where you figure out what it is you’re going to teach, or you identify about who your audience is and you say okay. You go through your list of people you know in real life that have that problem that you can solve.

They need your product, in my case starting out there are developers who want to learn to design better iPhone apps for my first book, and so you write out 10 actual names of those people, and then reach out to them and it should be people you know in real life. If you can’t get to 10 people then maybe you haven’t picked a very good topic

Steve: Right.

Nathan: Reach out to them and ask them, hey are you interested in learning more about how to design iPhone apps, and if so often I love it if you’d be one of the first people to opt-in to my list, and help me craft the content of this new site that I’m creating. That gets you your first roughly 10 people, but then you keep talking to them and the next questions you ask are where do you currently go online to learn about this topic, and then the other question is what problem and frustrations do you have with it right now, or what are you stuck on?

The first question is going to tell you to do a whole list of where your target audience hangs out online, so you can go after those people. It’s going to be the sublets, the blogs, everything, so that’s where you get most way to promote your content. The second one is all those ideas, it’s a list of you answer all of those, you put them on especially in the right blog post one by one answering each one of those things, and that’s your next six months worth of content, and so that’s what gets you started, that’s how you get to 100 subscribers.

Steve: Okay, is this kind of the strategy you used to launch your first book?

Nathan: No, I wish I had been that sophisticated.

Steve: Okay.

Nathan: I mean it’s similar; I just did it with less content and less focus I guess.

Steve: Let’s say you’ve already gathered your first 1000 subscribers, what are some next steps after that?

Nathan: One of my favorite things to do is to do an email course, and so there is something like when you tell people, hey set up for a newsletter. It’s not a very compelling call to action, and then if you tell people like hey downloads this free PDF that is 10 ways to do whatever, that’s also kind of has this weird thing where it’s like why do you need my email for PDF, can’t I just click on it and download it.

And so that’s why like email courses because then it’s like we’re going to send out this content over email on time and so you can digest it gradually. It’s not all a prank and then it’s obvious that you need their email because you’re sending it over email. I like to do those, I like a really targeted course and we’ve done; I did one called mastering product launches, because I was getting asked about how to do these product launches. Then every time that I would write a post about marketing, I would link the call to action at the end of the post would be to this mastery product launches course.

It’s totally free, so I go from a guest post on like I bought one for smashingmargazine.com and so it’s all about product launches, and it’s like 4000 words long. It’s pretty detailed and then the call to action at the end is like hey if you want to learn more check out this free course that I put together called mastering product launches, and I ended up getting over 1000 email subscribers just from that one guest post…

Steve: Nice.

Nathan: Glued to the email course.

Steve: nice, so instead of just a regular old link to your blog you link to a landing page that’s a sign up form instead?

Nathan: Yeah and it’s super streamlined, there is no actually links to my blog, there is no side bars, there’s none of that. It’s just content about here’s what you’re going to get form to opt in. The other great thing is that it gives me something to promote, so it doesn’t send a couple other times with other ConvertKit customers. And so there is this guy, his name is West Wages, and he put together a course called– I don’t remember what it called, but it was about online video. And so that finally– instead of telling people randomly like, hey check on my blog I talk about video, it gave him something that he could– people understood the value immediately and they could link to it, they could share it and all that.

Then he promoted it on his Twitter and Facebook pages, and he got maybe 50 subscribers or something, but then he went out and he promoted on a product side, and picked up like 300 subscribers. And then he just kept sharing it around and submitting it to different sub-reddits and just trying to get this out there, and by the end of the week after launching it he had 1000 subscribers, but it came from 10 different sources.

Steve: Right.

Nathan: That’s some of the cool ConvertKit features, there’s a lot of referral tracking, so you can add a campaign attribute to any URL that has a ConvertKit form in it, and then the form will track all the stats separately for that campaign.

Steve: Okay where all the form, where the form was shared basically?

Nathan: Yeah so if like if I wrote a blog post, and then I wanted you to share it I could set up [inaudible 00:40:22] blog post and then question mark rep equals Steve.

Steve: Okay.

Nathan: Then when you share that I would see all the stats that like the visitors, the subscribers, and the conversion rate just for what you shared.

Steve: So in a way that’s kind of like a mini affiliate program without a payout so to speak? Okay.

Nathan: Yeah just really you’re tracking, and so in West’s case he was able to know exactly where all the subscribers came from, because he worked hard. Like, it wasn’t one source that gave him 1000 subscribers.

Steve: Right.

Nathan: He got that from 20 different sources, then there is another one just as a quick example, a lady in Apollo [ph] put together this great course on designing iPhone apps related to her book, and they call the mobile design book, and that course just went on product hunt and she picked up 3000 email subscribers in two days just out from product hunt.

Steve: Nice, so I’m curious this is actually a problem that I have with my email autoresponder sequence, so I have a sequence about 30 for this free course. Sometimes people don’t get certain steps, so the main guts of the course is in the first nine steps. Sometimes people don’t get step two, sometimes people don’t get step four, what are some best practices to make sure that everyone gets every single step?

Nathan: Like to make sure that the emails actually reach the inbox?

Steve: Yes.

Nathan: There’s a lot of things that go into deliverability. I mean the main things are, this is actually kind of random, but maybe you want to avoid trigger words that are going to– or like a high density of trigger words, it’s going to get things to go into spam.

Steve: Is there a list of these available online, of this trigger words or?

Nathan: You know it’s now a hard and fast thing.

Steve: Okay.

Nathan: If you Google spam trigger words, I’m sure some good things will come up, because like officially like you shouldn’t use free and that sort of thing, but it’s more about the density of the words. Just read to the email and say like does this feel like something that’s a spam writing. Oddly enough a lot of profanity will trigger spam filters.

Steve: Okay.

Nathan: And so a good friend Paul [inaudible 00:42:34] who writes some amazing content just happens to use a lot of profanity. If he uses too many F words, then his email will be more likely to go into spam, which is totally random.

Steve: F words in like the body of the email?

Nathan: Yeah, yeah.

Steve: Okay, interesting.

Nathan: Yup, there’s bunch of spam filter checkers, I think litmus has one and them a few others, they even put the content of your email in, and they’ll kind of say hey here’s what we think will happen. Other things– who you’re sending from is another is a really big deal whether the IP addresses are blocked by certain providers, and then every single company is different.

One thing that we do is we maintain a lot of email accounts with a lot of different Yahoo, Gmail and all that just constantly test, and we have those subscribe to random ConvertKit customers and so then we’ll check like, hey did that email actually show up in the inbox because companies like Gmail and others are just, they’re total black boxes as far as what’s happening. They’re not going to tell you, like they’re basically there is a code of delivered or accepted sorry, so your email provider knows that it was delivered, and then like Gmail will send a response back and say yup we accepted it.

Steve: Right okay.

Nathan: They accept everything, they don’t actually give you any information, so it’s all for testing and that sort of thing, but it’s one of those problems that it’s up to your email provider to solve, and so if you’re having issues with that talk to you email provider, it’s actually…

Steve: Well let me ask you this question, so does the open rate and the click to rate affect the deliverability of future emails?

Nathan: Mm-hmm.

Steve: It does, so if I blast out something to like let’s say 50,000 people and only a fraction of those people open. The next time I blast, but no one marked it as spam, the next time I blast a similar amount is it going to be even less in terms of deliverability?

Nathan: It’s one of those things where people don’t come– and by people I mean email account providers.

Steve: Okay.

Nathan: Now like MailChimp and everybody I mean like Gmail and Yahoo and then they are not going to comment on it specifically and say for sure, but they’ve hinted many times that have you sent us 50,000 emails, and a bunch of our customers don’t engage with them, then we’re going to think less of you.

Steve: Okay.

Nathan: Which makes sense, like another thing that we’ve seen have an impact is replies, and so if you get more replies to your email, future emails will be– get better deliverability.

Steve: That implies I should try to solicit replies whenever possible right, on my order responder sequence even?

Nathan: Well, I think it’s great just from a business perspective of triggering, getting ideas for future content. Like I’ve heard Brandon Dan teaches freelancing, and so he has this welcome series about how to be a better freelancer, and one of those emails it just says hey what is your biggest frustration as a freelancer right now? And then he categorizes all those responses in Gmail, and then when he needs– it’s like what should I write about today, he just taps over to that and he’s goes, oh there is 50 great ideas. I just have to answer that frustration and there’s a 2000 word blog post. Yeah it’s great for deliverability and it’s great for content ideas.

Steve: Would you recommend then like highly segmenting your list, and only sending out because it’s a lot more energy to do this right especially if you only sell like a single product. Do you not recommend blasting like your entire list for email that you think is relevant to most people?

Nathan: I am– I would send it out to everyone you think it’s relevant to. One mistake that I see a lot of people making is that they filter down, I guess they over segment and over complicate. They are less like ConvertKit gives you some amazing automation functionality like InfusionSoft, and others, and so I guess what I am saying is people can use it too much where they build so much sophistication into it that they don’t put their effort into the content and the growth, because then they are like, oh when this happens now also other magical things happen.

Steve: Right.

Nathan: I recommend people add like just the right amount of automation to make cool things happen without going crazy. I recommend sending most listing the book of your list, I would just recommend cleaning your list, and encouraging people to unsubscribe. Just say hey if you’re not getting a ton of value from it, just unsubscribe.

Steve: How often do you this, just curious for yourself?

Nathan: Like every six months or so.

Steve: Every six months and then you just target no opens within the last six months, and then you send out an email saying here click here if you’re still interested?

Nathan: Yeah you do, yeah no open or clicks, you have to know that like open is not a reliable metric.

Steve: Right.

Nathan: Because in all providers it’s based on whether that image– whether the one [inaudible 00:47:46] transparent, Jeff was displayed. You just need to like don’t just delete them, like send them an email and say hey you haven’t been committed to this relationship like I have– it’s not me, it’s you. I think it’s time that we start seeing other people, but if you’re willing to put in some effort and read my emails, click this link, and won’t delete you.

Steve: Okay.

Nathan: Yeah, so I recommend keeping a nice clean list, that’s one thing about ConvertKit that’s great. Now since we’ve grown and we have all these customers that are sending really great emails. We get really high open rates, and so we’re able to maintain much higher deliverability. Like if you ever use MailChimp it will tell you like put the average open rate by industry, and I would always use it and then say you’ve got 35% open rate. The average for your industry is 1.7%, and I was always like you’re kidding, right. Across all of email marketing open rates tend to be really-really low, but we could…

Steve: Yeah so what are they like for bloggers for using your tool, what is the average open rate and click through rate?

Nathan: Average we– so click through rate depends on so many things, I don’t think it’s…

Steve: Sure.

Nathan: Worth focusing much on, but open rate I would say between 20 and 30%.

Steve: Amazing.

Nathan: To be average, and then we’d consider good anything over 35 to 40%.

Steve: Wow, that is quite high actually, I wasn’t expecting to hear it to be that high, interesting, okay.

Nathan: Yeah we like to send emails that people actually want to read, and so bloggers tend to create lots of content and all that, and then we recommend that people clean their lists because your subscribers some of them will lose interest, and or change emails account, so we recommend you clean up those non engaged people.

Steve: Do you have any stats on just like deliverability, like just the email even reaching their inbox?

Nathan: There is not a good what– because the email provider, like Gmail and Yahoo don’t report that back.

Steve: Okay.

Nathan: There’s, you can’t like put a nice metric on it.

Steve: Okay, and actually you know what Nathan, I didn’t realize we’ve been chatting for quite a while, so I’ll just limit to a couple of more questions here, just curious what your take is on single verses double opt-in. I kind of asked this to some of the other email providers I had interviewed and I was just curious what you take was on it?

Nathan: Yeah so the more steps you have someone go through in order to opt in, the fewer you’re going to get, they’re like a few total people, but the more engaged and motivated they will be. It’s just do you want a larger list of less engaged people, or do you want a smaller list of highly engaged people. That’s, I don’t think there is a right answer, it’s up to you on single versus double opt-in. In other countries like Canada has some rules about double opt-in, so if you are in Canada sending email you do double opt-in. Otherwise it’s up to you if you– personally I’d rather have a smaller list of highly engaged people, and so I do double opt-in on almost everything.

Steve: Okay interesting, and do you guys personally do anything to prevent like one dude from like sighing up 100 different people?

Nathan: Yeah, so because like to prevent spammers, because everybody pays to sign up, we don’t have a free plan or any of that. Then at this point we get I don’t know 10 customers a day, so you can tell right away when someone signs up you know like something seems fishy about this.

Steve: Okay.

Nathan: We have all these triggers where like there is no free plan that people can send through, and so that discourages tons of spammers already.

Steve: Okay.

Nathan: We had two spam accounts and we caught them before they sent an email, so it was just one of those things we were like, why are you talking so much about Paypal, you seem to be acting as if you are Paypal. It was one of those sort of things, and so they were still importing subscribers and looking at that one. It was a bummer because they were paying $250 a month, but we deleted them and we…

Steve: Yeah I mean it could ruin your service right if you let them stay and spam everyone right?

Nathan: Right especially because we maintained such high open rates, because we don’t have, like there’s is this whole range between sending an email that people really want, and then also sort of the spectrum that were on, but then there is the email that gets 5% open rates that’s not technically spam. It’s just some company sending out an email to everyone who’s ever made a purchase from them over the last decade. That’s what a lot of email marketing industry is doing. It’s getting terrible open rate, a decent number of spam complaints, but it’s all technically legal and fine and there not spammers. We don’t have any of that on our system, and so we get high deliverability arcos the board.

Steve: Any plan on maintaining these strict standards going forward?

Nathan: Yeah the…

Steve: Okay.

Nathan: We can– bloggers produce great content, that’s who our customers are, and it doesn’t help us in any way to compromise on that.

Steve: Okay, hey Nathan thanks a lot for coming on the show, I learned a lot about email marketing and how to kind of launch a sass company in a slow and steady way and getting feedback all on the way, so thank you for that.

Nathan: Yeah I guess I should mention a little bit so we talked about the like the very beginning times of ConvertKit that ever since making that full time switch, it’s been growing like crazy, and now we’ve got people like [inaudible 00:53:37] and we have about many other top bloggers using us. We sent 7.5 million emails last month, so now we’re growing very-very quickly and a substantial player in the market, but it’s kind of fun to go over the beginning times too and remind people to stick with their projects even if they haven’t like been overnight success.

Steve: Totally and hey Nathan where can people find you and where can they sign up for your service?

Nathan: You can find me at NathanBarray on Twitter nathanbaray.com. Barray is B-A-R-R-Y, but ConvertKit is just at convertkit.com, and that is everything I’m working on these days.

Steve: Awesome, well thanks a lot for coming on the show Nathan, great talking to you again man.

Nathan: Thanks.

Steve: All right thank you.

Hope you enjoyed that episode. As I have mentioned many times in the past, email marketing makes up 90% of the money I make on my blog. Now ConvertKit is a serious contender to replace my existing service, and I am actually carefully evaluating it right now. It also helps that I know and trust the CEO, and I have faith that he will treat his customers right.

For more information about this episode go to mywifequitherjob.com/episode95, and if you enjoyed this episode please go to iTunes and leave me a review. It is by far the best way to support the show and please tell your friends, because the best complement that you can give me is to write a referral to someone else either in person or to share it on the web.

Now if you’re interested in starting your own online business, be sure to sign up for my free six day mini course where I show you how my wife and I managed to make over 100 k in profit in our first year of business. So go to mywifequitherjob.com, sign up right there on the front page and I will send you the course right away. Thanks for listening.

Outro: Thanks for listening to the My Wife Quit Her Job podcast, where we’re giving the courage people need to start their own online business. For more information visit Steve’s blog at www.mywifequitherjob.com.