My First Million - How to Become A Billion Dollar Creator with Nathan Barry, Founder of ConvertKit

Episode Date: February 2, 2022

Shaan Puri (@ShaanVP) and Sam Parr (@theSamParr) are joined by Nathan Barry (@NathanBarry) to discuss ConvertKit and how Nathan has grown it to over $200M, how to become a billion dollar creator, why he refuses to give Shaan a price discount, and much more. ----- * Do you love MFM and want to see Sam and Shaan's smiling faces? Subscribe to our Youtube channel. * Want more insights like MFM? Check out Shaan's newsletter. ----- Show Notes: (00:25) - Nathan's real estate investment making $15k a month (03:10) - His background (10:00) - Discussion on whether or not annual plans are worth it (15:50) - The billion dollar creator and the best ways to monetize (50:00) - Nathan discusses some of his failures and what he would do if he were starting over (01:01:30) - Shaan asking Nathan for a discount ----- Past guests on My First Million include Rob Dyrdek, Hasan Minhaj, Balaji Srinivasan, Jake Paul, Dr. Andrew Huberman, Gary Vee, Lance Armstrong, Sophia Amoruso, Ariel Helwani, Ramit Sethi, Stanley Druckenmiller, Peter Diamandis, Dharmesh Shah, Brian Halligan, Marc Lore, Jason Calacanis, Andrew Wilkinson, Julian Shapiro, Kat Cole, Codie Sanchez, Nader Al-Naji, Steph Smith, Trung Phan, Nick Huber, Anthony Pompliano, Ben Askren, Ramon Van Meer, Brianne Kimmel, Andrew Gazdecki, Scott Belsky, Moiz Ali, Dan Held, Elaine Zelby, Michael Saylor, Ryan Begelman, Jack Butcher, Reed Duchscher, Tai Lopez, Harley Finkelstein, Alexa von Tobel, Noah Kagan, Nick Bare, Greg Isenberg, James Altucher, Randy Hetrick and more. ----- Additional episodes you might enjoy: • #224 Rob Dyrdek - How Tracking Every Second of His Life Took Rob Drydek from 0 to $405M in Exits • #209 Gary Vaynerchuk - Why NFTS Are the Future • #178 Balaji Srinivasan - Balaji on How to Fix the Media, Cloud Cities & Crypto #169 - How One Man Started 5, Billion Dollar Companies, Dan Gilbert's Empire, & Talking With Warren Buffett • ​​​​#218 - Why You Should Take a Think Week Like Bill Gates • Dave Portnoy vs The World, Extreme Body Monitoring, The Future of Apparel Retail, "How Much is Anthony Pompliano Worth?", and More • How Mr Beast Got 100M Views in Less Than 4 Days, The $25M Chrome Extension, and More

Like, you got to choose the business model that's right for you. But answer the question of like, okay, can this audience that I have make me a billionaire? I have one house that's going to pull off like $15,000 a month and it's just a single house. So you'll beat it by quite a bit. No way, really. What's the house worth? I bought it for 900K. That's ridiculous.

And it's running out now at 700 a night. Where is it located? Yeah. It's in Boise, like right next to the Boise State University Stadium. So do you get like basically like football tourists or what do you, who's renting this thing for $700 a night in Boise? We're live by the way, Nathan. We're live. Great.

No, for real. Who's renting it? So you get like all graduation, everyone coming into, you know, tour the university or whatever else. and then just anyone coming into downtown. It's like a five bedroom, brand new construction. Sam, it actually looks like the kitchen looks somewhat similar to the place you just linked me to. So why have you bought like five shelves on the tile backslash and all that?

Why have you bought like five more in the same area? That's my question. Yeah, it's a million dollars. It's a million dollar or 900,000 or whatever you said, under a million dollar house that's making 15 grand a month. Why don't you buy 50 of them? Well, I just bought this one. And so it's not making that yet, but that's what we're like the bookings for the summer.

So it's at, and I just did 8,000 for January locked in. And then the summer bookings are coming in at like quite a bit higher. Like so the January ones, you know, our last minute and Boise's slow there. But yeah, the summer ones are coming in at $8,000, $9,000 a night, $800,000 or $1,000 a night, which is wild. And we haven't even put a hot tub on it yet. I just bought a hot tub today. And so we'll get that in there. I should be able to charge a little bit more.

And it's going to be good. Wow. So we should start. We should intro you. Well, yeah. So we're live. That might go live. This is Nathan Barry.

Nathan Barry. I've known Nathan since a Gumroad meetup, Sean. I went to a Gumroad meetup in like, for real. I'm not joking. 2012. 2012. 2013. Nathan was doing Gumroad.

He had this book called Author. Right? Authority? Yep. And I don't even remember what the book was about. Just making it living online. But then you also had graphic design stuff and you had a really cool blog and you sold all types of stuff. But I've been homies with you for a while. And then you launched this thing called Convert Kit.

And I was like, Nathan, like the other things work and just do that. And anyway, now it's a business that both Sean and I think are. I didn't end up doing it. There's some mechanics problem with the way that we can get into it. We're an LLC in it. It gets complicated as like pass-through funds and stuff like that. But, yeah. But Sam, you're in the cool club.

I'm in the cool club. And basically his business convert kit does like $26, I think, million dollars in recurring revenue. It's like a mailchip competitor that's better and different. Their revenue is all completely live. So if you Google convert kit revenue, you can like see the revenue. Do you regret now that your business is actually kicking ass, do you feel like I kind of wish this wasn't all super transparent? Or, you know, because it's good. early on. Transparency is great early on. It gets you a bunch of people interested. Then when you

start winning, you know, you're giving more value than you're getting back usually by that by doing that. Yeah. So I think it's a great idea if it's for a mission reason and a terrible idea if it's for like a marketing reason. And I actually had two friends who sat me down at one point. And they're like, Nathan, this is an intervention. Take down your like public metrics page. And which they were right. Like they had talked to competitors who were like, wow, this is so helpful, like, strolling through it. And they're like, you know your competitors are doing this, right? I'm like, I know.

But really it's like, it's a mission thing of the whole mission for the company is to help creators earn a living. And so if we can put this public blueprint out there, that's not just like the snapshot in time where, you know, you've done it with companies where you're going through and you're like, oh, they said here, they're at 10 million. You know, you're like trying to piece together the trajectory. We all have the same spreadsheets. And so, like, actually doing it in.

real time means that someone can be like, okay, I'm at 50K MRR. Churn is absolutely brutal right now. I wonder what Convercats churn was when they were at 50K, right? And you can go back and you can find the date range and be like, oh, in this time, here's all of their metrics, here's how fast they're growing and everything. And so it's like this, for anyone who wants it, it's this masterclass where you have to dig in and find the data, but you can find everything about our business. And my hope is that it's like breadcrumbs, that every future entrepreneur who wants to

recreate what was done. How much traffic does that page get? Do you know? What's that? How much traffic does that page get? I don't know. It's not actually even our page. It's convertkit.

Dot barometrics.com. Right. And it's not even ours. Wow. Presumably not that much traffic. So you're for real not using it for marketing. If you don't even know how much traffic it gets. Okay, now I believe you.

But when you said the mission thing, I have a system of tuning out whenever anybody says values, mission, vision, vision, things like that. I'm just like, ah, by default. I do not believe anything you're about to say for the next 30 seconds. How many people work there now? Sixty-nine. Because when you wrote this blog post two years, I forget, I've been reading your blog for so long. I don't remember the years, but you wrote a blog post and you're like, oh, we're making, let's say, $8 million a year, but we basically had $20,000 in the bank. Or that's, I don't remember the exact numbers, but it was almost as extreme as that, right? Yeah, so the company is totally self-funded.

There's no outside capital. And so when we hit like this period of rapid growth, we grew from 2,000 a month to 100,000 a month in 12 months. And, you know, and that was just on 50 grand that I'd put in. We spent all of that money. And so what happened is the company was growing and profitable, but we were doing like 3% profit margins. And so we'd gotten down to the point where we had, I think, like $10,000 to $12,000 in the bank. And like that was growing, but we were, like, expenses were increasing by so much more

that, like, our days' worth of expenses was getting shorter and shorter. And so that got super scary. He just wanted to know, okay, random story. So, I think you all know Andrew Warner. Mixer G.

I was at a Mixer G meetup in San Francisco. Like, he would do these Scotch nights. And, uh, after one of those, like, I think we were walking out of the building, and he's like, you know, that kind of pulls me inside. He's like, did you seem super stressed? And I was like, yeah. Like, and I kind of told him the financial situation.

And we were like, our bank balance was growing, but, you know, you're like now paying all these people and you have no money. And so I told him about that. And he said, okay, here's what we're going to do. I'm going to wire you $25,000 tomorrow. You're going, if you need the money, spend it, do whatever you, 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 in an, you know, like an insurance blanket for you. And then, you know, wire it back at some point. Did you know him well? The only thing, if you,

uh, we'd hung out in person, I think twice before. So I knew him a little bit. I'd been on the podcast. And what were we going to say? The only thing he said is like, if you do decide to raise funding, like convert that into, you know,

I'll be the first person in for that. If not, why are they back? What a smart move! Okay, but the thing that he said... That's such a good move. The thing that he said is the only thing that will piss me off on this is if you ever try to pay me interest on it. Like, don't try to make this a loan in any way.

And so I held onto the money. It sat in the bank account for like eight or nine months. We grew our bank account to the point that we had plenty of savings in the bank and all of that. And I wired the money back and like, Andrew. is forever one of those people where I'm like, thank you. Just because he pulled me aside and was like, did you seem stressed? And he was like, let me loan you a security blanket.

That's one of the coolest stories I've heard. That's frankly, that's amazing. Shout out to Andrew. We've got to have Andrew on now just for that story. We've joked about it before, but we should have them on for sure. Because if he's done it to you, he's probably done like some weird stuff like that to a bunch of people. So that's, he's probably had some interesting stories. Yeah, I mean, he knows everyone too.

So he's, he's, I'm looking at your guys as revenue. There's a huge spike every November. What did you do is like a Black Friday deal or what, what causes this huge? Yeah, we can talk about whether that's a good idea or not. So early on, right, when you need cash, 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.

And then what it did is it aligned a whole bunch of Renewals, you know, annual payments right around that same time. So it just keeps getting bigger and bigger, right, until it gets the point that you're pulling in like $4.5 million in a single month. You're also getting all the churn at the same time. So I don't know that like, we're not going to keep doing that. By the way, there's so many things like that in business that I'm like, we're doing this.

I can't really say if it's a good or a bad idea. I wish I could. But we're just going to keep doing it for now. And then like, I just kind of feel like it's going to work out. But I could totally see that like we didn't need to do any of this or that this like long term is hurting us more than the short term gain. What's an example? Like in my DTC business as far as kind of thinking about this is we do this model that like drops new products all the time. Every single week we drop new products.

And it's great because it causes this sales spike. But it also puts you on this treadmill of new products that you have to release every week. and that means you got to do photo shoots of those products every week. And then that means that you have to have inventory. Whether you sold your previous inventory or not, you got to buy new inventory. Like most brands, they don't do that. They only buy new inventory when they're out of the old stuff.

So even though inventory sucks out cash, you know, it's like, well, I'm buying it because I'm sold out. We're not even doing that. But on the other hand, it's creating like, when I look at his chart, it's creating this spike every single week. And I'm like, okay, so that's good. These other three things are bad. And like, I don't know how to weigh these against.

other because they're like in different categories that speak different languages and on different timescale. So it's just hard to, hard to know if this is like a dumb idea or a bad idea or a good idea. I think the thing to look for in that is something that served you before might not serve you now. So like that served us really well for a period of time because it brought in this cash, you know, and you could tell the team like, hey, like payroll is good. We're set for a long time and it gives that level of comfort. And also like in the early days, turn is often high in a business just because you don't have very many mature accounts. And so locking that in is really good.

But then if you get to this long, you know, much later in the business, you're like, look, we're on accrual accounting. We don't really care. We have plenty of cash in the bank. Like this spike at this time doesn't make a difference. Right. And so just I'd watch for those things where it's like this served the business well for a while and it doesn't anymore.

Who built the early version? So I did all the design in front and development. And then I hired, freelancers to, you know, write the rails back end. And then that went okay. And then it went much better when I hired a longtime friend named David to come on and like full time build it. But that was two years in. And it was making enough, it was making enough money to pay him? No, that was where I paid him out of the 50 grand that I put in, which was like our our savings and everything. It seems like a pretty good return. I mean, 50K. And you're able to get that bill and turns into what it is

now, or at least it got you to enough revenue to pay people. Yeah. Yeah. And, I mean, it's wild what you can do when, one, you're doing a lot of the design and code yourself, you know, so you got to count that in the costs. But, but, yeah, and then you just fund it with,

that makes it sound easier than it is. But, you know, you fund it with growth. Simple. Not easy. Yeah. Simple, not easy. That's right. So, Sean, Nathan, he's got this blog post called, like,

how to build wealth. I think it's called. We have another blog post. post, Ladders of Wealth. He's got this actually this other great blog post called the billion-dollar creator, I think it's called, or the billion-dollar blog. Let's do the billion-dollar one. Sorry, I'm sorry to Sam. I didn't know where you're going with that.

Well, I just want to say, so this whole thing about transparency, so Nathan, I don't think you publicize this. But I'm on this email list. And every month or week, probably month, I think, he sends out, dude, it's the craziest shit I've seen. He sends out his entire net worth, and you could see, like, how much cash he has, how much, like, which stocks he owns of how much, like, his angel investments. Like, you see his entire, all of his finances. I got to get on this list. That sounds amazing. It might be on that list.

It's all the content that I wanted to, that I wanted, like, other people to publish. Like, Sam, you talk about Fat Fire and, like, that's a fantastic subreddit. And I just want more of those conversations because I've written a ton about people who have, or like how to get from, say, like, zero to $100,000 on the internet. You mentioned my book authority. That's what that was. But like once you kind of get to the point where you're making $100,000, $200,000

or more online, like people don't talk about what you do with their money. Because, you know, if you do that, someone's like, oh, you know, like there's Sam just breaking about how much money he has again or, you know, something like that. And so I was like, okay, I'm going to make a private newsletter. And I just charge people a hundred bucks, like just to filter out the, the, uh, anyone who's going to complain about it, I guess, or say that I'm breaking. And then just say, I'm going to write about all the stuff that I wish I knew when I made,

like, my first 250 grand, uh, online. And so the way that I, I described your blog or that email is it's kind of like face tattoos and cornrows. I think it's super cool when other people have them, but I don't want it. Like, you know, not for me, but it's cool what others have them. There's only 200 people on that list. So it's a small group right now. Dude, I don't know, man.

But Sean, what was your question about? Well, I wanted to kind of walk through the framework here. So you have this blog post. That's kind of like, I know you worked on that for a while, kind of shaping your thinking here. And then we also have Sam, who's somewhat bearish on the idea of the creator economy, thinks it's kind of overhyped over over buzzword. And you're Mr. Creator economy in a way, Nathan. So I think this might be good.

But let's walk. I don't think our opinions are opposites, by the way. I would say probably our opinions are not opposite. Yeah. For the sake of argument, let's just walk through. So you basically have these four rules of building a billion dollar audience. So I guess like first, why did you even want to do this? Like kind of like, what got you interested in this?

And then let's walk through the four. Yeah. So the article asks a question. Like the whole premise of it, and that is what is the most profitable place to direct attention? Right. So everything we do, right, we're recording a podcast now, whatever you're doing on TikTok or if you're a movie star, everything else, right? You have attention. And brands want it.

They're willing to sponsor, you know, all of this stuff. And so it's like, okay, you have the opportunity to point that attention somewhere. What's the most profitable way to do that long term? because you look at people, you know, maybe who are taking sponsorships, right? Five grand to sponsor the newsletter or, you know, 500 bucks for a sponsored Instagram post or anything like that. And that's actually not that profitable. And when you dive in, you learn that 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. And then my other favorite example would be Ryan Reynolds, who, you know, right, he's doing ads for other people and probably getting paid a million bucks here, 10 million dollars there, you know, that kind of thing. And at some point he goes like, forget that. I'm going to buy my own companies with Mint Mobile and Aviation Jin. And I'm going to be my own spokesperson.

So I don't get cash. I get equity. And so, you know, you just watch this process of people doing it over and over again. And that's actually my hypothesis with Converkit, right? Of I have attention on the internet through running a blog and a newsletter and all of that. How do I want to monetize it? Sponsorships, e-books, membership, a bunch of things. of things. I'm like, nope, I want to monetize it through ConvertKit, building a SaaS company.

Like, that's my version of the billion-dollar creator. So that's the whole premise of the article. And it's like, uh, so you have a couple examples. So, okay, so rule number one is you have to build more than a personal brand. So what does that mean? You give the example of Jessica Alba, of Mark from Primal Kitchen. So what, what is the nuance here? It's like it's not just your face, your name. You need to actually create a brand around. around your lifestyle or your interest, is that it? By the way, Sean, Primal Kitchen is the sugar-free ketchup company that I like. So this guy named Mark, he's like, kind of looks like the 65-year-old version of me,

but like even more jacked. And he like has a health and health blog and he starts selling ketchup and he sells that for like $300 million. Yeah. So, I mean, what Mark did with, I mean, his blog was called Mark's Daily Apple. And it was like the leading, you know, like paleo kind of. health blog in that space. And a blog like that, you know, when he was doing this, 2006, 2010, that kind of thing, you can make a million bucks a year off of that blog,

and he was, right? But you play that forward. And that's, it's all about him, all about his name, all that, right, his name is in the name of the site. But, I mean, you can build substantial wealth that way. What he didn't said is he started Primal Kitchen, you know, kick started this whole brand by saying, like, I have the most popular site in the space. let me, you know, make these paleo-friendly ketchup, mayonnaise, that kind of thing. And then he goes, you know, a few years later. Do you know how big his audience was? Do you know how big as much traffic he had at the time?

It wasn't huge, huge. Like, it was no bigger than ours. Yeah, 100,000 subscribers on the email list, maybe. So 100,000 wasn't kind of like trusted audience size to kick off this. Yeah, you got to remember audiences were a lot smaller. Like even just 2015, 2012, like that kind of time frame. But yeah, then he sells it to Kraft for $200 million. You can't sell a blog.

Like a blog doesn't sell for $200 million. You know, like all of these things. And the crazy thing is he still owns the audience, right? The thing that kickstarted this whole product, he still owns. He can sell off that whole brand talking to him at a conference. You know, he's just on to the next thing, figuring out what he wants to do next. He didn't have to sell his name and whole identity with it. and Kraft is thrilled with their purchase.

Kylie Cosmetics is probably the biggest one that people know about because you have tons of attention through Instagram, TikTok, whatever, the TV show, whatever. And instead of just saying, hey, you can pay me, people will you used to say, wow, you have to pay $25,000 for a tweet from Kim Kardashian

or then it was $25,000, then it went up to like $250,000, then $2 million for an Instagram post from... Is it $2 million? It got up to that, range where it was like either hundreds of thousands or low millions to get like an actual like endorsement post from from one of them and um and so then you know cool you can make a lot of money doing that you're right you can you can stack up quarter million dollars at a time but kiley cosmetics

was a billion dollar brand so it's like well who wants to who wants to pay me to promote their products well it's mostly like skincare products makeup products or for kim Kardashian it's her shapewear like, you know, like, and Chloe Kardashian, it was like, you know, fashion or whatever. So Chloe launches true American jeans. Kim Kardashian launches, I think it's called, what was it? Skims. Skims, is it like the shapewear brand? Dude, Sean, you were on top of it.

Keep going. Kylie, Kylie, cosmetics. Kanye, Yeezy shoes, right? Larry's like, they all turned to say, whoever is the most willing advertiser, actually you become my competitor. and I'm going to launch my own brand, and have my own equity in this thing. And there's a guy in the NBA who gets made fun of for this,

which is this guy, Levar Ball. I don't know if you guys know this guy, but basically he has three sons, all three wanted to make it to the NBA, and this guy's this is like loudmouthed guy. They got like a reality show around them because they're sort of like the, like, you know, basketball version of the Kardashians.

There's three brothers and like a kind of an overbearing parent who is like architecting their business strategy. And when they were going to, the guy was going to get picked second in the draft and Nike offered him a contract and Ditas and instead he created big baller brand you know triple B he created his own shoe line and like the shoes kind of sucked and like you know he didn't have the full business plan and people were making fun of him for like oh wow you turn down a guarantee 10 million dollars from Nike to like launch this thing 10 million dollars a year or

whatever and it's like actually that was the right move now maybe his execution was slightly poor but it was actually the right move and and a lot of these NBA players would have been better served had they done that themselves well how's it going now the shoe thing so the shoe thing's not going good basically the guy they had running it like was like kind of stealing from them so they fired him that was like a black mark on it the second brother never made it to the NBA so that was like a little bit of an issue um the first brother kind of underperformed his potential at that time and actually now that it would have worked because the the youngest brother the one who was like the the one who's kind of like he was kind of like a fuck boy a little bit he's you know

It was like had a gold, you know, like a diamond grill, had like a Lambo at 15 and was like, you know, he was kind of off the reservation. He actually turned out to be the best one. He's actually a star player. And if they had kind of built it properly around him, it probably would have done a lot better. So I, Nathan, you'll get a kick out of this. So like three or four weeks ago, we did this thing where we said we're going to give five Gs to one or two, three people who take our clips, download it, posted on TikTok and get views. There's this kid who did it. And I don't remember how many views he got, but like our hashtag, I think got 30 million views in like two weeks. And this guy accounted for a lot of them. And multiple of his videos got a thousand or sorry, a million views. One video got so big that we drove 35,000 new members to the subreddit fat fire. And they like, and they complained. And I was like reached out to this kid. I'm like, who are you? And he replies back with like Michael at you, Michigan.org or something like that or dot you or whatever it is. And I was, like,

I'm like, wait, dude, are you in college? And he calls me and I FaceTime with him and he's in his dorm room. And he's young. He's still in college. He's university thing. And he's really cocky, not in a bad way, but he's like, he's got Hutzpah. And he goes, man, I knew I was going to do this. I wanted to prove to you guys that I could do it.

I want you to pay me money to do this now. And I'm going to do this for other people. And we're going to change the media game. And I'm going to raise money. And I was like, okay, hold on, dude. Hear me out. And he goes, I'm going to go raise money for this thing. Do you want to invest?

I go, bro, listen, you do not want to raise money for this. Here's what you should do. You are so talented at this that don't raise money for this, but get it big and start launching other stuff on top of it. And if you want to raise money, raise money for that stuff. And own all. He owns this thing called like, I forget what it's called Future, but he's got like eight handles now that have like a million something followers.

I'm like, no, no, no. Don't raise money for this thing, man. Own that forever. And that's your piggy bank and your audience. raise money for like this other thing that you want to do and funnel it through there. But don't sell that thing because I raised a little bit of money for my thing, which was like that. And I don't regret it because I got the outcome that I wanted,

but I do regret it because it definitely, you're massively handicapped because of it. Yeah, well, and that's, I think such a good point because you can have that platform to launch whatever you want in the same way that, you know, Mark Sisson can use his platform to then go launch the next thing, right? He probably has contracts that say he can't compete. in the exact same space, but he could do a fitness thing or he could do something else, right?

You have the ability at the point you... I was going to give an example. Cona McGregor is doing this pretty brilliantly in the UFC. So, like, the UFC gets knocked a lot because of they have, like, low fighter pay, right? Like the percentage of revenue that they give to their fighters is way lower than other sports. NBA is 50%.

NFL is, like 50%. UFC is like, I don't know, 15 or 20%. So the fighters are, you know, they go out there, they get their, you know, face beating in and they're they'll make $20,000 off that fight or $40,000 or $80,000. And then they only get to do that two or three times a year. So it's like a pretty brutal sport for low pay. What Connor McGregor did was instead of selling the attention, try to try to make money as

his kind of like service fee, he created a brand around literally every part of his lifestyle. So he's like, all right, this thing's going to get me famous. But then, okay, what am I famous for? People like my suits at the press conferences. Cool. I'm launching a suit brand. okay um i'm irish i'm gonna launch an irish whiskey i think just sold for i don't know if you know samliss he walked yeah like he walked away with a hundred exactly then he's like um cool uh i'm super fit

because i'm a ufc fighter my body's amazing here's my p90x program it's called mcgregor fast you can you can buy my program and subscribe to that and you can get fit with me oh you're getting fit and um guess what else do i do i recover okay here's a recovery spray that i spray on my leg that's like you know like makes my leg uh recover faster after workouts. And the guy is literally just selling like every piece of his lifestyle as a independent brand. Like, you know, I think at one point he was thinking about launching a sports betting exchange. It's like, what is the best business? Like, who wants to pay me? Oh, Draft Kings wants to pay me? Hmm. Maybe instead of Draft Kings is McGregor Kings now. And I'll launch a competitor.

He just, he just opened up a bar called the Black Ford. Exactly. Oh, you know, I had good success whiskey. What else do we do? Irish Stouts. Okay, I'm going to, so he bought a bar. Not that the bar is that good. It's like a bar in his hometown. A bar's not going to make a ton of money. But then he used that bar as the like, basically the backdrop to film him creating a stout. And now he's going to sell a stout as a new like alcoholic beverage brand. And it's kind of amazing.

The guy's going to become a billionaire. And fighting is going to be the lowest part of his income stream is my guess, which is insane. I bet you, I bet you, Connor McGregor, I bet you he goes through. Well, he might make a billion. He might lose a billion. I think you could. Nathan, you're worth like, did you reveal the valuation of your company? We raised it 200 million.

Okay, so let's just, I don't know what the facts are, but let's just say you own 90%. So you're worth $180 million. Do you think that you can ever spend through that? I would have to radically change in my lifestyle. But do you think... Is that enough? Yeah, that's so much more than enough. I think I spend like 200 grand a year.

So if that gives you an idea. If you take it like if you set aside the things like when I'm not buying assets. That's your burn. That's your actual burn. It's like 200 grand a year. So yeah, it would take a lot to yeah, to spend through that. So do what do we let's go let's go to this wealth ladder thing. Well, I, hold on.

There's a point. Oh, go. So what what Sean was saying about, like the trend between all of these people is That's what's in the rule number two of selling products, not attention. And that's the flip, right? So Connor McGregor is a perfect example of this because everyone's expecting people to sell attention, right? That's the NASCAR logos plastered all over the car equivalent of that.

And you're like, great. Connor's doing that every celebrity. And so, you know, you expect that everyone, like every influencer is going to do that. And 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 one or two. But that's where you're going to build this real wealth.

Then let's just hit the other rules real quick. So rule number three, drive higher customer value through recurring or repeat purchases. So you'd rather have a product that you can, that has repeat purchase rate versus a one-off. That's the big idea there. Yep. Yeah. And that's the thing of if you just look at the most valuable brands, you see that, a lot of them are selling a product that someone buys many times.

Right. Yeah. So, you know, if my first million created an idea journal, it's probably not going to have super high reburip purchase rate because one journal will last you a long time versus if we made, you know, the pure money deodorant. And pure money deodorant is something that you would go through every two months, then that consumable is going to be worth more than, you know, so product selection is important here.

Yeah. And so even just going back to the ketchup example, right? that you know you're going through ketchup every month every couple months you know that that's way better than something that lasts forever right billionaires ketchup great okay so then last one uh choose a better business model so um what do you what are you what are you pointing out here with choose a better business model yeah so there's a couple things in this one is uh well i'm using the example of uh vani harry who is the food babe um so she had information products business, she's selling cookbooks, meal plans, all of that. And then she teamed up with

a friend of mine, Derek Halpern, who was also in kind of that online business space. And they went and made like a health supplements company. And so it's completely different. They've made this switch from, you know, that business model into selling this product that people are buying on a recurring basis that, you know, the brand can be acquired. But then I think that the other example that's interesting, I love listening to Andrew Wilkinson on the show. And, you know, he, did his whole thing. His whole thing is using a very cash flow positive business, right, in MetaLab, of they're doing agency work. Honestly, it's a very profitable business, but it's not valued that high in the market. And so he's like, okay, I'm going to take low to medium quality revenue and use it to go buy really high quality revenue.

You know, 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. And then you see this a lot in software where someone will launch to, like you'll have two versions of the same tool. One's like the WordPress plugin version where it gets it done and all of that. But none of those really turn into like substantial companies. And so the ones that made it are like Optin Monster where they built a WordPress plugin, it was okay, made millions of dollars. but like it's not valued like a software company.

Whereas when they go and rebuild like Syed Balke, rebuild Opt-in Monster as a SaaS platform, added more features, you know, they can charge a different pricing model, all of that. And then it's really valuable, right? You have to raise money at Silicon Valley valuations.

You get to sell the company at those multiples. Even though it's like fundamentally accomplishing the same goal for the user. Let's talk about three people who I think left money on the table. You named two of them. I have a third. Actually, you might have named all three. Okay. So you talked about Ramit Sethi, who you think, you know, maybe he's making 10 million a

year in revenue, selling kind of high-end courses. His audience is all around personal finance. And he pointed out, like, at the time where he had a bunch of audience and trust in personal finance and was advocating for a philosophy of like, hey, you know, low fee index fund style investing, set it and forget it, you know, saving a certain portion of your revenue, he could have built wealth front, which just got acquired for $1.4 billion yesterday or something like that, which was like a robo advisor doing just that. So instead of selling courses, could have built a software product. So left some value potentially on the table.

Another one is Tim Ferriss, right? Tim Ferriss has makes a ton of money on sponsorships and ended up making a ton of money through investing in the right startups because of his brand name. But, you know, could he have done what Joe Rogan did with like on it supplements, right? I think Tim Ferriss has a huge trusted audience. He said, look, I tried every supplement and here's my issues with them. So I'm launching the paleo ketchup. I'm launching the neutropic supplement. I'm launching the protein powder, whatever he could have picked, you know, I think is a $500 million business given the size and trust of his audience.

But it seems like he didn't go that path. So what do you think of that? Oh, the third was Marie Folio. What's the third? I think you had her in here. And I think you pointed out You pointed out two things One is she builds everything in her name

Instead of building like brands that can be Dissociated from like her person The product is her telling you content Her selling you time and consulting or whatever else Her selling you a course Versus her creating a product based on her belief system And you trust her so you think this product is going to work for you So

But listen to this Sean You're not exactly but you're criticizing these people. You're doing the exact same thing. So you've got this big audience of people who like and trust you, it shockingly trust you and do what you say, but you're building this other thing that people are begging to know what it is. Like, do you think that, like, you should follow your own advice here?

Oh, totally. You know, that's why I like this article. I think it's an eye opener for, it pieces together a bunch of like anecdotes and philosophies. and by the time you read it all the way through, you're like, yeah, of course. Of course I agree with this. So I did it in a way with the fund.

So for example, podcast, podcast ad revenue. I think our first year I made like 70,000 or something like that in podcast ads. It wasn't much. It was like a very, the value of the audience I felt was bigger than the, the value of the trust in the audience was bigger than the ad revenue. And so I bet on that. I was like, okay, well, what if I raised a fund from these. people who have been listening.

And I'm not going to take any, I'm not going to do any pitch meetings. I'm not going to make a presentation. I'm just going to say, hey, if you trust me from this podcast and you want to invest alongside me in startups, you can. And so now that fund is like an $8 million a year

investment vehicle. So if you just take the math on that, right, you get 2% of that in management fee. Okay, that's not that much. But then you get 20% of carry. So 20% carry means you're basically getting 1.6 million of startup equity that you're investing per year.

for free. So 70,000 in ads versus 1.6 million in startup equity of which I get to pick the startups. And I think those startups can, you know, what if that's 5x in the next, you know, seven to 10 years? So that means each year I'm getting something like $5 million a year of value out of a product created from the podcast. So that's an example of doing it. An example of not doing it is I do a course. And the reality is I do the course just because I, A, I like teaching and B, I like the instant cash flow from that because I can go buy stupid shit with it. So for example, I, like, I stopped teaching my course because I just got busy doing another shit.

And then I really wanted to go, like, do some random NFT speculation. And I was like, eh, feel stupid doing this with my money. What if I just, like, did a course for, you know, two weeks? And then that let me go buy a bored ape and a crypto punk and whatever else. Okay, that sounds more fun. And so I'm like, yeah, I'm down to, you know, teach successions to do that. That seems like a good trade in my head mentally. But I would say that's not actually a good use of time.

And then the new thing we're building, the new product is kind of in that boat, right? The Milk Road isn't called Sean's Crypto newsletter. It specifically has a new brand name and it has like staff around it. And it's a product that if it works can be big and it'll be supercharged or kind of initially, initially distributed by people who already follow me and like my content. And then the second criticism which Nathan can address, which is like, and maybe Remit would say this. he's like, well, but I like blogging. And I don't know anything about starting like a fintech company.

And what's your reply to that, Nathan? Yeah, I mean, I think that's a great answer. And like all these people who I like lightly pick on in my article, they're all friends. And so that's one where like you got to choose the business model that's right for you. But answer the question of like, okay, can this audience that I have make me a billionaire, trying to have as many examples of like, if that's the outcome that you want, you know, Or maybe it's not a billionaire, right? Because you raise money or something else.

But getting on that hundreds of millions of dollars type scale, then it's like, okay, well, here's the framework that it has to happen. And if you're saying like, look, you know, we list to people who have amazing businesses, right? They can complete control of their time, making millions of dollars a year, you know, like absolutely no complaints there. So this is all on the case study of like, how would you do it? Actually, one of my favorite examples, I used Michael Hyatt as an example. in this article. And he replied, he sent me an email right after it and said, like, hey, we actually discovered the exact same thing. Personal brand entirely. We're selling digital

products. We're very tied to our email list. We're doing like sponsors and stuff like that. And we realized like, oh, this business is going to, you know, reach some limits. And so he then built out all these sub-businesses. They built out a journal product, you know, other physical products and realize, okay, how can we build, take what we have now and use it to leverage, you know, other independent brands and, like, Kickstarter and launch them. And so it's fascinating to, like, use someone as an example

and then have them come back and be like, you're spot on in describing our business, but you're actually two years. Like, you were spot on two years ago. We realized the same thing. We're fixing it. And now, like, everyone will see the result a little while from now. And so, yeah, if people want this path, you know,

that's the way to go about it. How big is this? How many notebooks does this guy sell? I don't know that I have the numbers. I'm trying to think what he put in the article. But his other products are now bigger than all the things that we know him for. So in the tens of millions of dollars. That's crazy.

All right. What are we saying, Sean? I was going to jump to the ladders of wealth. Because I think this is the other kind of nice framework that you have. And this is kind of like, I think some people have heard of kind of stuff like this, but I just want to, like, lay out the fast version and then we can go into whatever's, whatever's interesting from this. So you have this image of, uh, of a series of ladders. And it's not like one ladder that you just go up, up and up. It's basically like, if you use,

if you choose this method of wealth creation, your ladder can be this high. But if you choose this method of wealth creation, it can go one rung higher or it can go two rungs higher or four rungs higher, depending on which one you choose. So here's, here's how it works. So it's basically the lowest ladder, the smallest ladder is you're selling time from, money. So that's having a job or being, yeah, having a job, basically. Then there's your own service business. So this might be like an agency. You're charging by the project. You have some clients. You charge some hourly rate. Whether you're, you know, it doesn't matter if you're like making logos for some company or you're a lawyer. You're actually in the same boat. You have a service business with

clients. You charge an hourly rate. Then there's productized services, which is, give an example of a product of productized yeah so the example would be let's say I charge $100 an hour to redo the copywriting on your website you know and so I'm I'm doing that or I say for a thousand dollars one time you can buy it with a credit card you know I will go and rewrite your site you know or write you one whole landing page and so there's a couple really important things there one the purchase is being made without me talking to you like if I'm charging a hundred bucks an hour 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 so if I get better and better if I hire people any of that right like I'm not having to sit there for 10 hours and do it and so there's a bunch of these skills that have to learn to do the productized service

an example a simple example I think Ryan Beagleman came on the pod long time ago and he talked about drop servicing which was a version of this. So like the example he was given is like, there's these products that are like, you pay $30 and I'll draw a picture of you, and you give me a picture of you

and I'll draw you as a Simpsons character. Or like you can send this as a gift. So somebody loves the Simpsons. You can give me a photo of them. I'll draw it as Simpsons character. You get it. So it has all the elements you talked about. Self-serve.

You come in. It has a predefined price. You just click a button and you pay. You get a defined product and product out of it. So we're kind of both clear on the bargain. And then third, you don't know how long it takes me. You don't know how much it costs me. I don't have to do the work myself.

So with a lot of these character services, it's like it just gets piped to a, you know, person in the Philippines who's an artist. They take the gig. They submit it. They get $7. The service keeps, you know, whatever, $23. And it's all done.

So that's like an example of a productized service. And by the way, isn't there like a Facebook group called productized service? Who runs that? There's a guy running that's pretty interesting. We talked about him. Yeah. Green. Do you know the guy's name?

Greenfeld maybe or something like that? So what he does is he's got this Facebook group. And the reason I like is so niche, but it's actually pretty valuable for if you're in that niche. So he has his Facebook group called productized services or something like that, productized businesses. And what he was doing was he would just show an example. So he'd say, oh, look, this is a real estate agent. And before, here's how it used to work. You know, here's their page, here's their face.

Call them up, become a client, blah, blah, blah. And he's like, sorry, that's not a good example. It's, I make, I design websites. I can code anything. You can hire me as a freelancer. And then he changed it to a product I service, which is, you're a real estate agent. You need a website for your company. I make real estate agent websites.

Come here, pick one of the six templates, push go. I'll give you a website. And I'll charge you a fixed fee of $250, a, or $500 to give you that website. And so it's basically a way of productizing a service. You know what the best name that I've ever heard for that is Jack Butcher, who's our friend, and he has this course. It's got, it's a beautiful.

It's called Build Once, Sell Twice. So good. It's such a good name. I took the course, yeah. Did you love it? Yeah, I loved it. Just because everything Jack does is done so well. So, you know, he could, you know, write me a birthday card and I would be like, wow, I love

birthday cards now. It's like, do I really love birthday cards or do I just love Jack Butcher? I think I just love Jack Butcher, actually. Yeah, his ability to take something and, like, distill it down to the absolute essence. And, like, build one, sell twice, is that, like, it's selling products. You know, where you're saying, okay, I can make this thing a single time and then sell it as many times as I want, which everyone talks about the upside of that, of like, oh, this is going to be amazing, right? I can build this and sell it a whole bunch of times.

No one talks about the downside. that like it's so freaking hard to do the first like to make the first one you know whereas if I'm building a one-off thing like using websites for example like okay I'm supposed to build a website for Sam he's paying me 2000 bucks like I build this out it's not that hard I can use my skills to do it the product version is like building a website builder you know that's incredibly hard and so you have this like trough for a long time where you're you're not going to make money in the short term but the like leverage is incredible how old are you now 31. So you're 31. As long as I've known you, we've known each other since we're both like 23, 24. You've always

pretty much been the same where you were pretty calm, very patient. I would say patient would probably be the best word to describe you. And there's been a lot of times, I remember in 2014 or something like that, I didn't have much money, but I hollered at my really rich friend. And I was like, man, Nathan is doing like a hundred grand a month, like in revenue. This thing's going to be big. you should try to invest. And maybe I could broker a deal. And if I did that, then I met, you probably had a ton. You've also probably had a ton of people who were trying to buy the company for a

life-changing amount of money. And you've probably had loads of other opportunities. So my question is, how have you stayed pretty calm and also incredibly patient throughout all this? Patience is something I struggle with. Sean was telling you about how he launches like a new, does a new drop every week. and like, and I think that that's rooted in like, oh, but we need the numbers to go up this week. And like you got caught and I've done this.

I do the same thing where I'm like, but it's not growing now. And I need to. So how have you done so patient and long term focused? Well, I think part of this personality. And you're right that like patient and relentless are probably two things you can use to describe me back then and now. But I think a lot of the ideas that are in some of these articles that I try to write about is really building this one thing. So I think about, what analogy is strip malls versus skyscrapers. Let's say we're getting into real estate development. And we've got a piece of land and you're

trying to decide, okay, what should we build on it? And so you want to make money quickly and so you build like, you know, first little office building or something. You got like a radio shack there. Now you're made, you got a little bit of cash flow coming in. You know, you want to expand so you build another, you know, add on to that. Now we've got a subway. And we're, we've built it out and we've got a little strip mall or a shopping center. And that's like we're going to use up our land. Each time we're expanding horizontally. And so we're, you know, launching a new product. The version of this is the like the blogger, podcaster or someone who's like, I've got my ebook, my membership site, my whatever other thing that I'm doing. You know, I keep adding

and each one makes a little bit of money. My approach on everything is the skyscraper model. 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 so like Converka is my attempt at a skyscraper. And like in the billion dollar creator article, it's all about people I think who are building those skyscrapers.

You've not always done that actually. I think and I think that that's a good strategy but I would actually say it's pretty cool that you've not always done that and I'll give you an example. But the reason why it's cool is because like you're flawed and you do you definitely have even though you're incredibly patient and long term thinking like maybe

it's not rooted in this probably but like there are some examples. For example, like you've done a bunch of book launches. You've launched like eight or nine things that have sucked. You did this great Twitter thread. Well, no, he did this Twitter thread. I said here he sucked it.

Yeah, he goes, here's the nine things that I've created that were horrible. No, he had a thread. I don't know if he used the word suck. Maybe he said fail. Yeah, flopped or something like that. So in that, this is something else, right?

Like, we all want to jump in and build the most perfect product. and you can't do that because there's all of these skills that you have to learn. Like that's the point of this Ladders and Wealth Creation article is that like business and building wealth is the combination of like a thousand little skills. And if you try to do it all at once, you know, like you're going to fail. And so that's like in these ladders. The one point that I'm trying to make is that the like, you know, I put marketplaces and social networks, you know, at the top of the hardest ladder. And then just below that is SaaS. Because if you think about the number of skills that you have to know in order to do that.

Like, Sam, what was the first product you sold online? I, well, there was two. It was liquor. So I sold alcohol on the internet. And then I also created a guide on how to find a roommate in San Francisco. Okay, so that guide, like, do you remember as you were trying to figure out how to collect payments for that or like how to put together a page that would sell it. That's why he was at the Gumroad Meetup.

Yeah. I ended up using Gumroad because it was so stressful. I couldn't figure out. I was like, well, I was like, I remember going to Shopify. I'm like, well, does Shopify let you sell PDFs? How does that work? So all of those things, right? You're trying to figure out how to do, okay, how to collect money on the internet is something

that you have to learn. And now we're just like, we could rattle off a whole bunch of ways. Right. But someone's starting out saying, hey, I want to get into this. They don't know how to collect money on the internet. They don't know how to write headlines. They don't know how to collect email subscribers. Why that even matters, right?

All of these things. And so I think the best way to do it is to learn through a bunch of these other little products. Right. So that was like basically what you're seeing all the way along with the ebooks and everything else is me learning all of the skills that ended up culminating in being able to build a convert. Yeah, that's fair. And then the other thing is like if I say, I only focus on convert kit. Like, that's not fully true because I like to have contrast in my life.

I think that's something that helps. And so, like, we started off, you know, riffing on some real estate stuff. And the reason that I like it is because you spend all your time sitting in front of a computer. And so doing something tangible, like Airbnb or something in the real world, like, to me is the opposite. Because I get to actually go see a real property. I get to, you know, visit in person. It's a totally different experience. My friend, Sean Blanc, says,

if you work with your mind, you should rest with your hands. And I like that idea of just doing something that's the opposite. And so I think if you give yourself these little indulgences of like buying a house and Airbnb or starting like a one-off paid newsletter that you run on autopilot. Or Sean, what you're doing where you're like run out and make a course and then you're like, okay, that was fun. I think that can be a creative outlet that then helps you focus on the main thing rather than saying like, oh, I'm going to go create 10 main things.

When you've been creating ConvertKit, let's say that either you've sold the company and you still want to like do interesting things or you're 21 or 25 years old and you want to start something. What interesting opportunities or problems that need to be solved have you've discovered where you're like, I can't do that now, but it'd be pretty cool if someone like, someone could totally get into the blank and do blank. Yeah, okay, this is honest, but a terrible answer to your question because I also did it, right? Is as we were doing email marketing, you know, and running the newsletters for like James

Claire and Tim Ferriss and everyone else, the thing that I wanted to do is then get into commerce. I'm like, okay, we have this whole side of it, right? Where we're sending all the emails, have the connection to the fans. Now I want to build the like the credit card processing. and I want to get a cut of everything that they sell. And so then I realized like, oh, and that was always the answer. Actually, if someone was like, if you weren't doing Converick, what would you do? And I always said, I'd go start a Gumroad competitor.

And then the nice thing is there's that synergy there. So it's like, okay, I went and started a Gumroad competitor called Converickick Commerce. It's in the same product. So it's like both a realistic answer and probably not very satisfying for you because it's not like totally different. Gumroad has been around for a long time now. Up until recently, they pretty much had never done anything to change it. And no one is competing with them.

But there's a downside. It doesn't make that much money. I actually don't know what it makes anymore, but as of a few years past, he would tweet out his revenue. And it was really hard to build a business where he was making like 4% of someone's like $10 PDF. You know what I mean?

So that's why you have to build a better business model. Right? And so if you look at something and say, how could we improve that business model? The thing that I saw in that is like, okay, what if we had another product alongside it that we sold? And so for Convercuit, we make money off of your email subscription. And so I now have these two things that go hand in hand. And so the commerce side is really good because now, like, we're able to, for every one of our customers, right, who's selling products, we're able to make a little cut of that.

And they don't feel like they're paying us anything extra because it's just a bit of the credit card processing fee. And then it also reduces our churn because anyone who's selling through ConvertKit commerce, right? They're now like Convercate is paying them rather than the other way around. And so we saw a radically lower churn. So I'd argue that like Gumroad by itself

or the gum road 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 Convercate it and make the creator marketing platform. This is turning into a sales pitch. But you get the idea that I'm trying to make. It's the combination of those two things that then makes it a fantastic business model.

And so you have to look at, okay, this is working. I want to go after this in whatever space it is. And then take a step back and say, okay, what are the flaws in the business model? What other products do I pair it with? What other audience do I target it against? You know, any of those things that actually makes it a compelling business instead of like an average business. And do you actually are you still hands-on with ConvertKit or are you, I know you're the CEO, but do you have someone helping you run it or are you still the guy in charge?

No, I'm way too hands-on. The thing that people don't tell you in startups is that like the growth that you see is a whole bunch of stacked S-curves, you know, of like you figure out things that work and it takes off and then it levels out and you've got to figure out the next stage of growth. And so I'm very hands-on. Like we've had a few executives leave over the last year, just a lot of change. And so I'm like completely in it recruiting new executives, working with the team to design the next version of the product. So yeah, I'm not the case study of what you should do for the perfect execution on.

You're not the four-hour work week. I admit not the four-hour work week. Do you grind? I mean, I know you got like 18 kids. Three. I know. I just, because as long as I remember you,

I think your oldest are like, you had your oldest when you were young. And so I always would tease of like, what do you have like 40 kids now? So you're like, you've always had a couple. And but you, are you grinding right now or do you have,

is it a 40 hour work? week? Right now it's a lot more than a 40-hour work week. But it's interesting of trying to structure that around like kids, you know, of it's a lot of like waking up early, you know, or like this weekend, we're headed out for our team of treat, like meeting of up in person. So I'm leaving Saturday morning. So like this morning, when my kids woke up early, I like, we went out of the house and like spent two or three hours together, you know, before, because I know I'm going to work all day and and then be gone all next week. So, yeah, I don't work a crazy amount,

but at least like 50 to 55 hours a week is probably what I am for. So I don't know if that counts as grinding, but it's definitely not relaxing. It's in the middle. Yeah. In the middle, I think of grinding and not grinding. What do you think, Sean?

I think it's great. You know, I think convert, I'm a user. So I, and I complain to Nathan all the time. I'm like, I'm paying too much for convert kits. And he's like, and you do complain about that. And he was good. And I just point out how much money you make. Yeah, he was like, but, you know, email is like making all this money.

And I'm like, yeah, but I just feel like email is free and like this should be free. And I was like, I was like, can I just get this for free? And he's like, well, you know, like, let me know what you think is, you know, he's very, very patient with me. And it was sort of like, you know, because I was like, I don't know. I told Ben, I was like, Ben, go find like what we should use instead of convert kit. And Ben kind of like search for a couple products. And then he was like, well, you know, like they're all kind of worse. But there are some cheaper options.

You want worse but cheaper? And I was like, oh, fuck, I got to choose worse but cheaper. Wait, what's your what's your, what's your, what's your bill every month? I think I pay like $400 a month. Maybe more. I don't even know. That's what you're and how much money do you make a month? Well, see, it's not about that, right?

Like it's more. Those are two separate things, I feel like. Because the email directly doesn't make me that much money. It's like through the email, I billed the audience. And then through the audience. if I launch a product or a course or whatever. Yeah, that makes a bunch of money. But that's separate work I got to go do at the separate set of costs.

They go into that. And so we actually did. We were like, oh, should we switch? And then I kind of respected that Nathan wasn't just like, oh, whatever it takes to stay. You know, here you go free. I was like, I was like, okay. The fact that he didn't do that tells me like he knows the value of his thing. And as much as I hate that I'm, you know, not getting this like free discount or whatever,

I respect that. And so I stuck with it. Nathan, are you Mormon? No, I'm not. Dude, you got that Mormon energy, man. How often do you do that? I mostly just hear it from you, Sam. You've never heard that from anyone else.

I mean, you live in Idaho. You had kids at 21. Like, you work hard, you're honest. It seems like you don't party. You got hardcore Mormon energy. Mormon vibe. Do all the time? Yeah.

You got a hardcore Mormon energy. You got to avoid the caffeine. No, Sean, what I was going to say is that what's funny is, so like Tim McGraw and Arnold Schwarzenegger both have Convercate newsletters and they pay full price. And they don't ever give me shit about it. But then it's like the internet influences where they're like, I should get this for free. You know, and I'm like, no. So it's fascinating because we've had that a lot over the years, right, of people saying like, hey, what discount can you give me? Do you know how famous I am?

And kind of what's fun is getting into. to, I separate them from internet famous and actual famous. And the more we've gotten into the actual famous space, the more it's been easy to say, like, no, man, here's the value that we provide. And I think I was giving you a hard time because you had just done a thread like two weeks earlier about your paid newsletter that was making like 50 or 100 grand a month. I can't remember if I, like, linked you to the same thread, but that's what I wanted to do in the Twitter DMs.

How big is Arnold's list? Oh, we can't say those numbers. But he's still relatively small. Whose list is bigger? His list or my list? My list is not very big. But his is big. I think it could be the same size as Arnold.

No way. That bitch? You don't have a favorite little like business model synergy. Is that weakly? So he was on like it's fun like as he goes around and promotes his newsletter. Right? Because he goes on like Jimmy Kimmel. and it's talking about his email newsletter,

which is always fun. Yeah, I go on indie hackers, dude. But when, like a business model thing that's funny is when one convert your customer links to another to grow their list. So like when Tim Ferriss linked to Arnold's list and said like, hey, you know,

go sign up for Arnold's list. You're like 40,000 subscribers. And it's just like our cut just goes up. You know, it's just one. customer just referred to the other, but now, anyway, it's a fun. Dude, you got to write a blog post, like, the best way to grow your list, partnerships. Here's, like, a list of, like, interesting people to partner with. I have a VP of Growth opening.

Do you want to come? He worked for Morning Brew, actually, as we discussed last episode. Yeah, last episode, Morning Brew offered me a job, too. There you go. It's actually, like, a great power move is to just offer a staff writer job. or staff jobs to CEOs of other companies just to like flex on them. Dude, hey,

you know, I heard things are tough. Just so you know, we're always, there's always a home for you here. So listen to this. The CEO of Mailchimp. Like the,

like a month into starting the hustle. I, like we wrote blog posts, whatever and we were, I was trying to hire writers. And I saw this awesome article. And I don't remember where it was. But the author was Nellie Bull.

I think her name is B-O-W-L-B-O-W-L-E-S. And now she's like a really famous New York Times person. And I think like even when I found her, she was actually at the New York Times, but like had just done a one-off piece for this small magazine. And I emailed her and I'm like, you are so good. Would you love to interview for a position at my company? Like we're looking for bloggers. And she was like, that's cute. But no, thanks.

And I will never forget that. She told me that's cute. I have held this grudge against her for years because she said it's cute for years. You can just imagine like the little pat on the head and the hair tassel that went with like that's cute, you know? It kept me up, but I'm like so many. I was like, I'm going to, how am I going to get revenge? And I don't have a good way. But that was like eight years ago.

Sam's like Arna Stark before bed every night. He says a list of the names of the people he needs to like get revenge on. It's like Nelly Bowles. I definitely have, you know, like what they said, like I got like a bunch of champagne bottles with people's names on it. And whenever I get back at, I'm like, crack that champagne in a bottle open and drink it. Like, yeah, I want some people's heads on my desk.

That's for sure. We have a buddy. We're going to get on that list. Not much, turns out. Not much. Yeah. Just don't call me cute. Just be like, you know, comment on one of his Instagram, you know, videos and just be like,

Awesome for a beginner. Just like you move on. You're still at it. Awesome. We have a buddy who is like the nicest guy in the world. Like, you know, we'll give you the shirt off his back. And nice to everybody. Kind of strangers.

Kind of animals. Kind of everybody. And you go into his house and on his fridge, he's got this like clip art picture. of a brand name of another company's logo with a target and like kind of like a red target like a sniper and he's got three on his fridge and I remember going over like what's this about and he's like oh yeah he's kind of like you know those are my those are my competitors I just every day when I come to the kitchen I just want to think about you know just sort of killing them basically and I was like whoa there's a dark side to the to Mr. Nice guy here do you have one of those Nathan

I would bet anything Nathan does not have anything like what we're talking about. You are so wrong. I bet you that he will, I don't know if he'll admit it. I bet you he hates MailChimp. Oh, see, I have weird feelings about Mailchimp because I have so much respect for them. And like, dude, you have respect to them like the guy who killed John Lennon has respect for him. It's called a love knife. You love him so much you want to kill him.

That's like what it is. It's like the guy who like killed the Pope That's what you're going to do So you have to separate the businesses Like the business from the people So I think that's true Like one time I was at a conference And Ben Chestnut was speaking

And so I emailed them and was like Hey man will you I don't know even know why he said yes But it's just like Big fan of what you've done Like in all fairness We're a competitor trying to take as much business from you as you can But would you be up for sitting down and talking

And he said like yeah I have a full. flight at this time, so I'm checking out of the hotel. So like, meet me in the hotel lobby, you know, and we'll chat for 30 minutes. Gave me the wrong hotel. Love it. Great power move, Ben Chessnet. Set me on this wild goose, too.

Yeah, he's like, that's cute. You missed your flight. He never had a flight. But, no, he, like, he sat down with me and told me all about how they launched their free plan and all this stuff. And then the, they were Ink Magazine's company of the year. This is the Ink Magazine, like the Inc. 5,000

event. And so the editor and chief from Inc. Magazine comes up while we're talking. He's like, hey, Ben, great talk, all of that. And Ben goes, hey, do you know Nathan? He's trying to kill my company. And, like, as he introduced me to the editor-in-chief of Ink

magazine, and anyway, so what would it look like if you just, like, assaulted him right there? Sam's gone up on the jail time. He's still thinking of like killing Nelly Bowls with a love knife or whatever. For the record, Nellie, I'm

I'm not going to do anything. Is this the same person that you had the interview, the famous interview with at the New York Times or the New Yorker or whatever it was? And like the interview did not go well. It did not go well. Was this with her or was somebody else? No, that was Aaron Griffin. And she like came to interview me and I don't even know why, but she was fishing for stuff.

And she's like, so like, what do you do in the weekends? Like, listen to Joe Rogan. That's what she said to me. I'm like, what? Like, no. Like he doesn't even like. like that's Monday to Friday. He doesn't even have a podcast on Saturday.

What are you talking about? Yeah. And she was like, well, like, because you're like a tech bro. And I'm like, first of all, most of New York Times revenue is digital. You're a tech company. So you tell me what your tech friends do? And so anyway, yeah, that thing go well. Did you storm out or how did that end?

Yeah, I was just like, I don't know what to say. I'm out of here. Yeah, it didn't end well. That's so good. Those interviews. I've only ever had one of those. I didn't remember who it was with, but where you're like, okay, I think we're done. Where you can just tell that they're like looking for some angle and all the questions are weird.

But why would anyone hate you? Because you're kind of perfect. It's good that you bring that up. Like, no, just kidding. It's like, well, I got a lot of flaws. It's true. So I'm not sure what the problem is. Yeah, it's like I like this.

I've got, there's a lot of bad things. I like it's like the shower. You see this clip of Biden the other day when he called the journalist was like on the way out. Did you see this clip? A stupid son of a bitch. He's like, you know, what do you think about inflation? And Biden just like, in that moment, was just like, lost it. He was just like, yeah, great.

Stupid son of a bitch. That's how I imagine, Nathan, like breaking character in like one of these interviews. So, okay, Sam, I have a question on this then. Like, do you think that being so nice in all of this and, like, everyone likes me? It holds back my growth as an entrepreneur and, you know, internet. want to be internet celebrity? No, because A, like, you're happy and it's working. So I think that's like the goal.

And B, you actually have dropped it a couple times. So you don't have to talk about this if you don't want to. But basically, you didn't like what Sahel at Gumroad did. And you called them out. And it was pretty, it was pretty vicious. And I knew that, do you know this, Sean? No, what did he call him out for? Dude, he just, like, publicly kind of bitch-slapsed Sahil.

and like it was crazy. So I was around Sam was talking about I was around Gumroad from the very beginning I think I was the first independent Or at one point they told me It was the first independent seller to cross $10,000 in sales on gum road So like from the very very beginning And anyway so friends with tons of people there

And like spent a lot of time at their office and all of that And a huge friend of Seahills but at one point he got burnt out on the company they had an offer to buy the company he didn't take it he laid everyone off instead like it wound down and

and like ultimately failed but the thing is with the platform like that they don't like fail and disappear they just like fail and coast and still like the software still works and all that and then he came back and told this totally different story of like here's how I

you know like VC is evil and I'm running the company like in this totally new way. Here's how I run it in five hours a week with like two contractors. And that was frustrating, but I didn't say anything. But then when they went and raised new money and didn't give any, they got all the VCs to write off their equity. They got all of the team members to be like, hey, it's a failed company, like give up your equity and all that as part of it. And they went and raised a bunch of new money and didn't go back and give the original team members. Like that pissed me off.

because it was like, I know exactly who built the software, you know, because I sat next to them as we were talking about it, you know, at their office in San Francisco. Like, I know they don't have any equity, and I know that you didn't take care of them. And now you're, like, telling this new story and everything. So, yeah, I guess Sam, I do make some enemies on the internet. You do.

And when you said that, I was like, well, I don't know, Sahel. He seems like a nice up guy from my limited interactions with him. But I was like, well, if Nathan's saying that, it's probably true. Yeah, you know, you could separate the... I think it's like the person from like the decision. I've made a bunch of bad decisions, but I don't think I'm a bad guy. Oh, me too.

I've made a lot. Yeah. And so, you know, I would separate the two like because he, you know, probably a nice guy. I don't know I'm super well either.

But, but you're right. Like, you know, the way he kind of got Twitter famous in a way was to come out and tell this story of like the kind of like it was like a fail story that worked. It was like, we were the hot,

thing. We raised money. We had all these expectations. People bet on us. It didn't work. And so now we're in this new mode. And I've seen the light. It was sort of like, you know, I got baptized. And now I believe that this business should be done this other way. Okay, fair enough. And some people really like that. They thought it was very transparent and all that good stuff. But it was weird that like, you know, a year or two later, like, I'm raising new money at a hundred million dollar valuation. It's like, wait, you're back on that train? Like, weren't you kind of saying, like, you know, all the things that were wrong with that model and like freedom. Yeah, championing the the freedom that you were getting and the choose your own destiny and

getting off the rat race. Like maybe I read it wrong. Maybe I was just skimming and I missed the point. But like that did seem strange to me. And then like you're saying, Nathan, like it's kind of weird to kind of to do that whole thing in public when a whole bunch of people bet on you, lost money on you. And, um, and are not participating in the like. like, you know, future.

And so that would leave a bad taste in people's mouth, I think. So, you know, I think it's fair points. You know, and I'm sure he's got his side of the story about why it's not bad and why it's not that and all those things. So, you know, fair enough. But he's not here. So I'm just going to say my side. And it seems like that'll be the final word.

I mean, tons of credit to Sahil afterwards because he, like, he owned up to parts of it and we had a good conversation about it. And he actually then when he launched his book. he actually included convert it and a story in it, which I was really surprised. So as far as people who don't hold a grudge, I think Sahel's one of them. Not Sam.

He's not Sam. I hold Sam. I hold grudges to share. And in fact, I actually manufacture grudges. So like, there's just one guy. I always call my rival. And I'm sure from his perspective, he's either like, who is this? Or he's like, wait, why are we rivals?

We got a lot, we got a lot just fine. And in my head, this is like somebody I met in when I was in college. And the guy's got like a super ultra rich dad, like billionaire dad. And I always used to joke, like, if I ever played basketball, there usually wasn't like another Indian guy, like, playing basketball. So if there ever was, like, the running joke in my group of friends in college was, well, Sean, we know who you're guarding.

Like, you have to guard him and you need to win your matchup here. Like, your honor is on the line, basically. Like, we need to know who's the better Indian basketball player on the court right now. It was just like this running joke. And so that got extended once we. I started a business with my college friends. They were like, well, seems like this guy is like, you know, your rival. And I played into it.

And we kind of made it a thing where the guy would be like, you know, hanging out with Richard Branson on his island. And we were like, just trying to create a chip on our shoulder underdog story. It was like, you know, I'd be sleeping on my air mattress that I was planning to return to Target to like save money because our business wasn't doing any good. And if you saw this other guy like, you know, sipping pinocaladas with Richard Branson, it just felt like, oh, those are the halves. and we're the have-nots.

And so I was like manufacturing these little feuds or like, I remember we did a, when we bought Bebo back, we were going to relaunch it. And I gave the scoop to this girl who was like really nice journalist to me. She was somebody I'd met. She seemed really nice. And I was like, hey, do you want the story? Like, I'll give you the story about like what we're going to do and how it all played out. She's like, yeah, great.

So we, she comes over. I do the interview. It's like literally, you know, we're playing patty cake. It's all good. article comes out the next day and the headline is like just some vicious it's like remember bebo huh yeah that you know that flop is back again it was just like it was like oh my it's like disgusting shot purrie launches as he told me the he told me the plan with his bad breath and i was like what you know like in my head that's what it said like it was like

yeah if you like spinach go eat some of the stuff that came out of shod's teeth it's still probably there. So I felt so backstab, you know, not, no love knife, just straight knife. And I remember just being like, so I never had the interview where I walked away. I had the opposite, right? Felt completely between. And I texted her, I was like, yo, what the fuck? Because actually the article was fine. Just the headline was completely brutal. It was just making fun of us and saying like, get a load of this fucking schmuck. And she's like, sorry. Like the editor writes the headlines. And he just thought that that's what would get more clicks. Like, I don't have any say in that. And I was like, oh, Oh, so fuck you in your profession was like, you know, where I landed on that. I think that was my only feud. Actually, my other one where I called, what's her name, the Jake Paul of journalism was probably the other one. Taylor Lorenz. Yeah, like, I think that I actually think it's great fuel.

I mean, like, I joke to my wife. I'm like, I'm fueled on like carbonated water and like grudges. Like I think grudges, I think are like the greatest fuel ever. Like, isn't that like the whole thing about being like a. chip on your shoulder like protein healthy fats and grudges is like my macro rage yeah yeah i'm just like yeah like i got to make sure i get my rage in that day otherwise i just don't feel like myself it's like rye gold i just love firing people um so anyway i think it's good i think rage is great that's the key takeaway from this episode people listen to me

like a lloyd let me go manufacture some grudges somebody yell out every day i do like And, Sean, when we first met Ben Levy, or I met him for the first time, you were like, well, you know, Sam's a little challenging. I just had to give him the heads up. I'm like, don't take a personal if he kind of fires off. Ari Gold is actually a great analogy because there's no, there's no, what's it called? Like, there's no hate behind the words, right? Like, I'm yelling, but I love you. Like, it has nothing to do with how much I like you or how good I think you are.

I'm just yelling because I'm yelling. And so I tried to give him the heads up, but you were so zen. This was post-exit. Sam is a completely different guy. He's, you know, you're not already gold anymore. He'll come back in due time. Dude, Nathan, thanks for coming on. Happy you're able to make it. I bailed on you last week.

Sorry, and I'm happy that we made it work this time. Yeah, thanks for having me. It's always fun. You want to promote your, like, what, yeah. Yeah, okay, so if people want to follow me online, I'm currently trying to grow my Twitter audience so you should go follow it there. I'm trying to see if I can go from

I'm at 50,000. What is it? 100,000. At Nathan Barry. And Barry's B-A-R-R-I. Usually when you try to grow your audience, you should tell them the name of the thing. You know, I only want the most dedicated

fans who are like really, no, I'm just kidding. Thanks for the advice, Sean. Add that to your ladder. Shove that in your ladder. You know what we didn't discuss him? We don't have the time now. But one time, Sean, Nathan renamed the company Convert Kit to something else. And he didn't realize it, but it meant like something like it was disrespectful to Hindus, Hindi's.

Hindi, what's the plural? And it was disrespectful to them. And he made this huge name change. And they changed the company back to Convert Kit after like 24 hours. Wait, what was it? What was the name? Okay. I speak anything.

But what does that? It means service. But in Sikh culture, it means like selfless service and like the highest form of worship. Yeah. And so it's a whole thing. Yeah. It's like I'm doing it. I'm doing a service for you.

I don't find that offensive. That's not offensive. Yeah, there were a lot of people who did find it offensive. And so, yeah, if we're talking, if we talk about mistakes. Turns out I'm not as easily offended. And owning up the mistakes. I got in trouble. So Hindus didn't find it offensive.

And actually had a lot of people who were like, that's, thought that it was awesome or something like that. But everyone who was from the Sikh culture, they were like, it had a much different meaning there. So anyway, that was a $500,000 mistake, but I owned up to it.

That's the whole thing for another time. By the way, that, the convert kit, good name. The other thing, like seven or whatever you said, not a good name. Like, so I think Hindu, Hindu worship.

That doesn't seem like the right name for an email. Yeah. Convert kids a great name. That's such a good name. Well, so maybe it was a $500,000 mistake that will turn out to be a multi-million dollar win. Do you still have the domain? Because we should just launch like a prayer service or like, you know, like a philanthropy thing for India under that name. I have some Indian startups that might want that name. I do have the domain. There's actually two startups, one that went through White Combinator and one other that have asked. I have asked for it at one point, but I paid $340,000 for the domain, so I'm kind of hanging on to it.

This is a four letter domain? Yeah, four letters. I didn't even ought to spell that word. I'd spell that word. S-E-V-A, right? Yeah. But it sounds like a bottled water company, not like something that you're going to like send emails from.

So I think smart move. My, I got in trouble this morning because I wrote, in the Milk Road edition that went out this morning. one of the things we covered was like oh the fed the fed had this meeting about interest rates and how that's affecting like the markets and uh and i was like basically i put a picture up of the committee that meets the fed open market committee and it's basically like a bunch of old white people and i was like you know today you know i had a bunch of different openers that i scrapped one was like here's a picture from a nursing home i visited recently oh wait no that's not right that's the fed open market committee and I scrapped that and I said something else and then I was like you know at today's

elderly white people committee and I like I had a strike through and then I was like no at the Fed open market committee sorry world McDonald's at like 7 a.m. And people got mad at you for that. It's like a seize candy and yeah people were like you know the skin color has nothing to do with it. And I was like yeah of course it's a joke and it has everything to do with my joke and like just the picture's funny and like wait I thought we could make fun of the Fed with no repercussions. Like that, there's like certain things that are really safe to punch at and the Fed seems like one of the safest, you know, the Fed, you know, the Senate. Like, who's defending their honor? I don't understand. Who are you? Is your mom on this? Is your

grandma on this panel? Too soon. Some people got mad at it. I was like, you should go ahead and unsubscribe because my filter is a lot looser than that. Yeah. Dude, Nathan, thank you. This is awesome. Yeah. Thanks for having me. We'll have to do it against them. time. And we'll have to hang out in Austin when you get this new property. We'll come and do a workout on the, you know, on the ranch. Come on. Let's go. It's good. Challenge. Accepting grudge initiated. All right. See you.