Jan 3, 2017 · 26m · top-founders
EP 528: ConvertKit Hits $480k MRR, Helping 10,000 Professional Bloggers Grow Email Lists with CEO Nathan Barry
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of 'The Top,' Nathan Latka interviews ConvertKit founder Nathan Barry, exploring how the email marketing platform bootstrapped from a stagnant side project to nearly $500,000 in monthly recurring revenue serving 10,000 creators. Barry details his high-margin financial model, 30 percent recurring affiliate strategy, remote team scaling, and rejection of venture funding in favor of sustainable profitability.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 50% of the talking time here. How this is scored →
Nathan as informed peer 4.3 Guest teaching 1.0 Guest disagreement 0.7 Nathan pushing back 1.7
speaking balance: gold is Nathan, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 16:22 Barry rejects feature-gated pricing complexity
When Latka suggests adding value-based or usage-based add-ons to boost ARPU, Barry firmly pushes back against complex feature tiers in favor of keeping pricing purely pegged to list size.
Hardest push from Nathan ▶ 15:15 Latka presses on high customer churnLatka directly confronts Barry about ConvertKit's 7.6% user churn rate, calling it out as very high while pressing on expansion strategies.
Biggest teaching moment ▶ 13:05 Barry details bootstrapping to 50% profit marginsBarry educates Latka on how advice from Mike McDermott allowed ConvertKit to bypass Silicon Valley venture rounds and scale cash reserves from $30k to $500k in five months.
Nathan holds their own ▶ 8:39 Latka demonstrates SaaS marketing economics expertiseLatka details the exact polling tactics he developed at Heyo to harvest webinar partners and breaks down the inherent viral economics of ConvertKit's business model.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Nathan as informed peer | Guest teaching | Guest disagreement | Nathan pushing back | Why |
|---|---|---|---|---|---|---|
| Weekly Giveaway Announcement and Listener Engagement | 5 | 1 | 1 | 2 | Latka conducts his standard fast-paced SaaS metrics drill-down, computing MRR on the fly ($480k MRR from 10k users at $48 ARPU) using publicly accessible Baremetrics data. The dynamic is cooperative and welcoming. | |
| Annual Plan Push and Cyber Monday Campaign | 4 | 1 | 0 | 1 | Latka inquires into the mechanics behind the annual plan push and Cyber Monday promotion. Barry provides detailed figures, explaining how $300k came in over two days alongside a first-month-free promo netting 1,000 new users. | |
| Joint Venture Webinars and Affiliate Growth Strategy | 5 | 2 | 1 | 2 | The conversation shifts to webinar strategies and affiliate marketing. Latka probes into the exact technical stack and direct sales process used to generate joint venture webinars. | |
| Scaling Webinar Execution and Nurturing Emerging Creators | 6 | 1 | 1 | 2 | Latka relates his own experience scaling Heyo via webinars to ConvertKit's built-in viral mechanism. Barry explains his philosophy of doing webinars even for audiences of 25 to nurture up-and-coming creators. | |
| Affiliate Economics and Commission Payouts | 5 | 2 | 1 | 2 | Barry reveals monthly affiliate payouts of roughly $45k and shares the story of near-insolvency at $100k MRR before receiving advice from Mike McDermott of FreshBooks to grow into profitability rather than raising VC. | |
| Cash Reserves, Margins, and Churn Dynamics | 6 | 1 | 1 | 3 | Latka pushes into ConvertKit's elevated user churn rate of 7.6% and explores potential pricing expansion levers. Barry stands firm on keeping pricing simple based purely on subscriber counts rather than nickel-and-diming features. | |
| Customer Acquisition Costs and Financial Health | 5 | 1 | 1 | 2 | Barry admits he does not track customer acquisition cost closely due to reliance on word of mouth and affiliates. Latka runs cash flow math and examines the distributed team structure and early origins of the company. | |
| Connecting with Nathan Barry and ConvertKit | 3 | 0 | 0 | 1 | Following mid-roll sponsor reads, Latka runs through the 'Famous Five' rapid-fire questions covering favorite tools, books, sleep, and advice to Barry's 20-year-old self. | |
| Episode Recap and ConvertKit Performance Summary | 0 | 0 | 0 | 0 | Monologue summary by Latka reviewing ConvertKit's key performance indicators, revenue trajectory, and team size before transitioning to the outro and promotions. |
Statements from this episode (22)
Barry: ConvertKit ARPU is $48 with 65% on $29 plan
“So we're at about 48 dollars in average revenue per user. So about 65% of our customers are on that 29 dollar a month plan.”
Barry: Annual plans reduce churn among early-stage prosumer SaaS users
“The annual push has a big impact on churn. And especially when you're going after kind of a prosumer audience, you know, the lower end of the spectrum at that thousand subscribers or less, they might be trying out blogging. They might not be super well establi…”
ConvertKit generated almost $300,000 in annual plan revenue in two days
“We did almost 300,000 in annual plan revenue in two days, just from that.”
ConvertKit gained 1,000 new customers from a first-month-free email campaign
“We did that first month free promo for our email list and we got a thousand new customers on that.”
Barry: ConvertKit Added ~25k Subscribers in 2016 via JV Webinars
“So we've probably added 25,000 subscribers to our list this year, just purely through joint venture webinars.”
Barry: ConvertKit Runs 10 to 20 or More Webinars Monthly
“We do about 10 to 20 or more webinars a month.”
Barry: ConvertKit hosts partner webinars even for only 25 attendees
“So if you can only bring 25 people to a webinar we'll still happily do it, because we have it down to a great system, and we see it as we get to do a live demo to 25 people.”
Barry: ConvertKit affiliate payouts total roughly $45,000 monthly
“45,000. It tends to find it to hang out about 10% of our revenue.”
Barry: ConvertKit gets 25% of revenue from affiliates with 30% commission
“So we, about a quarter of our webinar, a quarter of our revenue comes through the affiliate program and then we pay out a 30% commission.”
Barry: ConvertKit will generate $3.5M to $4M in 2016 revenue
“I tend to focus on the monthly numbers, but it's going to be, you know, three and a half, four million.”
ConvertKit went from 3% to 50% profit margins in five months
“And so we went from having 30,000 in the bank running at like three percent profit margins in February to by July first, we had half a million in the bank and we're operating at a 50% profit margin.”
ConvertKit targets a monthly profit margin of around 25%
“We try to keep the profit around 25,000 or sorry, not 25,025 percent per month.”
Barry: ConvertKit user churn is 7.6% while revenue churn spiked to 8.2%
“We see that it's at 7.6% of user churn. And revenue churn was sitting, you know, 6.8 or so. But actually, you know, if you switch to an annual plans, you're losing revenue. And so that counts towards revenue churn. So it just spiked in the last couple days fro…”
Barry: ConvertKit expansion revenue cancels half of churn
“We're about halfway there right now of expansion revenue canceling out churn.”
ConvertKit will price solely on subscriber count without feature add-ons
“We're trying to keep the pricing really simple and have it only be on how many subscribers you have, because that, you know, the more successful you are, the more I want to get paid and so I like that really simple pricing. So we're not going to add in, like, …”
Barry: ConvertKit does not track CAC closely due to minimal paid acquisition spend
“In the craziness of growth, I haven't nailed it down because we've spent so little on on paid acquisition. It just hasn't been a big channel for us so far that I haven't dialed in those numbers.”
Barry: ConvertKit employs 24 full-time remote team members
“So all around, we're at 24 full-time people now.”