Welcome back, here is Part 2 of how Convert Kit grew to $5,020 in Monthly Income… If you missed Part one, please CLICK HERE
Who Really Gets The Most Out Of Email Marketing?
Gave you ever wondered if you’d make more money with ConvertKit? That was a question that has a really good answer. The answer was something like, “anyone trying to build an audience quickly and sell products online.” That’s not good. Here’s a hint: if your market definition has the word “anyone” in it, you’ll probably fail.
One trend is that the more specific the book topic and audience, the more money it will make. In other words, “Introduction to Design” is not going to do nearly as well as a specific guide to something specific like “Web Design for Affiliate Marketers” In other words, be specific bro!!
Do you ever buy anything promoting in a bland, non-specific way?
I’ve given this advice dozens of times and saved plenty of readers from writing generic books that are practically guaranteed to fail. Despite giving that advice I made the exact same mistake. ConvertKit wasn’t messaged to a specific segment of the market, and as a result, no one thought it was exactly for them.
Another case of do what I say, not what I do. With the advice from a few friends I decided to focus heavily on one market and change all the messaging to match. We wouldn’t turn away customers from outside the market, but this would give us a focused audience to pursue.
ConvertKit IS Email Marketing for Authors
The segment they chose was email marketing for authors. One trend they saw among their most successful customers was that they wrote and sold books or courses to their audience – just like them.
They built ConvertKit with this exact use-case in mind: it’s the perfect tool to sell more books and courses. This new direction, combined with full-time work on the product, reversed the downward trend of revenue. By the end of October MRR had grown 23% to $1,646. Then in November they continued to execute on the same strategy and grew 27% up to $2,100.
Around this time they also started doing direct sales. Previously if they’d talked to someone at a conference and they expressed interest in ConvertKit, they’d talk to them and then try to remember to follow-up later. I’m sure you spotted the problem with that already: TRY to remember. Like you and me, they didn’t write it down, track the conversation, or anything else.
But finally that changed and started they tracking every conversation in a ConvertKit Sales Trello board. While at MicroConf, they were talking with Ryan Delk and another attendee who expressed interest in ConvertKit.
They talked for a while about how he could best use it. After the conversation, they opened Trello and added the person with to the “Interested” column on the ConvertKit sales board.
Ryan’s only comment was, “I’ve been trying to get you to do that for over a year.”
The focus on authors also enabled them to start reaching out to potential customers. Since technical authors did well with ConvertKit, they contacted all the top sellers on LeanPub and Udemy. Out of about a hundred personal emails, they picked up 5-7 customers.
Not great, but also not bad. Especially for this early stage. It was interesting to learn that even the top LeanPub authors aren’t actually making that much money, whereas the top Udemy authors are doing very well.
December was the month all this effort really started to come together. MRR grew 54% to $3,237. They started to get very encouraged about where things were headed. And because of a couple annual prepayments net revenue was even higher at $4,480. Doubling down
All these new customers meant a lot of feature requests. And they were starting to notice the flaws and little frustrations in the product. In order to make ConvertKit truly great they would need a full-time team focusing on it.
Dan was already on the team, mostly working on my books and courses, but over this time he switched over to focusing full-time on ConvertKit support. Marc was working about half-time on our development, but he was also busy with other projects. To build the big features like marketing automation, they needed to add a full-time developer.
But that costs money that ConvertKit didn’t have. In order to support growth over the past couple months they’d been funneling a bit of money from their books and courses into ConvertKit to make up for their increased expenses. Now they needed a full-time developer they’d need to make that official with a larger investment.
So on January 1st, 2014 they invested $50,000 into ConvertKit.
THEY TOOK MASSIVE ACTION
The next day a good friend David Wheeler joined the company as lead developer. Though, the new expenses did add stress. They trimmed personal expenses to the minimum, ended the lease on the office and moved computers and camera gear back home, and they cut back the extra money they were paying on the mortgage each month.
Since they had spent so much money buying and remodeling the house, their personal accounts were the lowest they’d been in years. In fact, that $50,000 investment represented the last bit of our large cash reserves from the year before.
They decided that focusing this way would make 2015 a lean year for their personal finances, but it would be worth it in order to build ConvertKit into a sustainable company.
Record growth and then a slump
The beginning of January they landed a few big new accounts and MRR kept climbing. From December 15th to January 15th they grew 60% to $4,067. That’s great! Except that’s not the entire month of January. If we look at the entire month things don’t look as good: On January 18th they went on a 2 week trip to Thailand to visit family. The trip was an amazing experience and they felt blessed to be able to travel like that. At the same time being away in remote parts of the world taught them two things:
- The team they have to run ConvertKit is truly world-class.
Several major things went wrong at a time that Nathan was on the remote island trying to make sure his stuff didn’t get stolen by monkeys. Dan, Marc, and David fixed everything and communicated with customers perfectly without any involvement from me. That’s a founders dream come true.
- Growth stalls out when he goes on vacation. They still hit 20% growth in January, but that’s only because the first 15 days were so good. They ended the month with lower MRR than they had on the 15th. Nathan’s hope was that growth would continue, though he didn’t expect it to at the same rate. But he learned that he need to get better systems in place for sales.
Getting back on track
In January Nathan started to notice a problem with “Email marketing for authors.” Their customers that most strongly identified with the term “author” tended to be on the smallest accounts, needed the most help, and were the most likely to cancel. In other words, they were hobbyist authors.
Not professionals. Somewhere in that time Dan and Nathan realized that their best customers didn’t start building an email list from scratch, instead they switched their list over from another provider. These people usually didn’t strongly identify themselves as authors. Instead they were bloggers, course creators, or something else.
How best to call them?
But the feedback was pretty strong from one-on-one conversations: the people who had the potential to be their best customers saw “email marketing for authors” and thought it wasn’t for them.
David spent the beginning of the year working on marketing automation, which totally changed ConvertKit’s capabilities. Before these automation features, you could do a lot with Zapier, but the process was clunky. Now, marketing automation is built directly into ConvertKit, and the user experience is 10x better.
With these powerful triggers and actions you can build a fully automated marketing and sales funnel. They’ll announce more about this soon. Their dedication to a great UX is best summed up by their Gumroad integration. You can now move purchasers from Gumroad into ConvertKit and add them to a course or form in 47 seconds. Seriously, that’s how good it is. You can set it all up that quickly. Watch this video: That makes ConvertKit the only email marketing provider to have a direct Gumroad integration. If you use Gumroad to sell products and/or courses, you should talk with Convertit.
Nathan spent last weekend up in the mountains of North Carolina for a mastermind retreat with Barrett, Caleb, Matthew, and James. In a 90 minute session they focused entirely on ConvertKit. They talked messaging, growth, and other strategies. The key takeaways:
- Rebrand ConvertKit to be “Email marketing for Professional Bloggers”. That statement best represented their best customers. The authors page is still available at /authors, but it no longer has the focus of our home page.
- Focus even more on direct sales. Talk to professional bloggers with lists of 30,000 to 250,000 subscribers to up their marketing game and switch to ConvertKit.
- Continue to provide incredible support and concierge migrations to move these professional bloggers over to ConvertKit and help them grow their lists faster and sell more products. That’s what they’re best at.
- Continue to feature our favorite customers. They do amazing things and they want to do a better job showcasing their work.
Nathan made it home late Monday night with perfect clarity on what he needed to spend his time doing and who their target customers are. That’s an amazing feeling.
Don’t you agree?
Meeting the goal
Then something happened that they’ve been working towards for 2 years, 2 months, and 9 days: we passed $5,000 in monthly recurring revenue. Based on the conversations they are now having, they we should continue growing quite quickly. Obviously with the team they have in place now and current expenses, ConvertKit isn’t profitable.
Their burn rate is now about $8,000 per month, not including Nathan’s salary.
Breaking the rules
Originally they set out two rules for The Web App Challenge:
- Grow to $5,000 in MRR in 6 months.
- Do it with only $5,000 in investment.
Neither worked. Instead of 6 months it took 26. And instead of investing just $5,000 in ConvertKit, they invested $55,000. But instead of giving up along the way, they pushed through what was a long, hard journey and met the ultimate goal: $5k in MRR.
This is just the beginning.
Now with a great team on board they’ll continue to grow to become profitable. I think they know exactly the steps that need to be taken in order to make that happen.
If you make your living from your blog, you should seriously think about trying ConvertKit. Convertkit was tailor made for people just like you and me.
Plus, they’ll handle the entire migration for you and set you up with marketing best practices along the way. Can’t say fairer than that…
Go on, give Convertkit a test run today!
To grab your copy of Convert Kit here:
Always Dedicated to Your Success,