Inside the $360K Rebrand That ACTUALLY Worked | Nathan Barry (Kit)

I made a bunch of decisions last year that if I were trying to sell the company are not the right decision at all.

You already knew the name Kit, you already had the domain. So what did you pay $360K for?

In a 3-month period after rebranding, we launched newsletters for Lil Jon, Ellen, Morgan Freeman, Tom Brady, Matthew McConaughey. It's just, it kept going. So I think about what are the decisions that are going to keep you in love with the this business, with this brand, to be able to do it for a very long time.

This resonates like crazy with me. The rebrand from ConvertKit to Kit, it kind of reinvigorated you. You're so excited, you're so passionate about it. It's almost like starting a whole new company with like bright future. Ahrefs Podcast. My guest today is Nathan Barry, founder and CEO of Kit. Formerly known as ConvertKit, which is email marketing software. Well, at least it used to be email marketing software. Now it is much broader, doing around over, I would say, $40 million in annual recurring revenue. Is that right? Nathan Barry, thanks for coming to the podcast.

Thanks for having me on.

So yeah, I want to talk about a bunch of things, mainly marketing, of course, but I want to start with branding because you famously rebranded from ConvertKit into Kit. You recorded the whole documentary series about it. You were quite transparent. But I think there's quite a few, quite a few things that I want to dive in there. And yeah, the first, the first question that I wanted to start from is you openly shared that you spent $360,000 with an agency to do a rebrand. But what I realized while watching your documentary series is that you already knew the name Kit, you already had the domain, you already had the vision for the positioning of the company. So what did you pay $360K for? Like what was the rebrand that the agency did for you?

Yeah, I think a lot of times when you work on brand over time at a company, you usually do that with an in-house team, right? 'Cause you're iterating on it and you're gradually figuring this out. We were redoing everything all at once. And so we needed, I guess we could have done it in-house, but we needed a partner to really lead that process. Someone who does it a lot to say, hey, in this condensed amount of time, we need to figure out every aspect of this brand. So we need to figure out the characteristics of how we're gonna show up. Are we like a fun, zany, playful brand? Or are we like a very serious academic brand? We need to figure out the messaging and positioning. And then all of the visual language. So everything from fonts and colors and logo all the way through to the icons that we use and how we visually tell stories. And then we got to bring that all the way through into the product, right? Because we are a software product. When you go from the marketing website, it has to match the product itself. So yeah, working with Codo was a fantastic experience because they were able to embed deeply with them. Our designers and marketers just worked so, so closely with them and we were able to get the step function of basically going from ConvertKit to Kit in a very short amount of time. And then they set us up really well, so it was something that our team could run with from there.

So like I mentioned to you previously, To me, a lot of this feels like reworking your visual identity because like I said, you had the vision for actual company, how it changes, how, how your, your product is changing, how your company is changing. But you wanted to, to reflect that visually, plus a bit of that in copywriting and with visual, with kind of brand guidelines, with colors that you want to use, with the style of illustrations that you want to use, I can see how you can maintain that across different mediums. Whenever you like sponsoring a conference or whenever you do banners, you can maintain the same visual style so people easily recognize that it's Kit. With messaging and copywriting, I like— I saw in your documentary that they did also guidelines for you for that. But how kind of meticulously does your team now follow all those kinds of messaging and positional guide? Do you really check every article or every banner message or every landing page against what they advised you?

Yeah. So we, I mean, we created all those guidelines with them, right? And so we went through their frameworks and process in order to do that. And so it was very, very collaborative. And then yeah, we absolutely, when we're writing something, we make sure that it's in that tone of voice, that it aligns with the brand. You know, we were talking at dinner last night and our mutual friend Greg Eisenberg was talking about why he uses Kit. And he said, Kit is for creators who are serious about email. And that is a very casual turn of phrase, but it describes what we do. And Codo helped us come up with a slightly different version of that. And so we say that Kit is for creators who mean business, which just has that little bit of a copywriting angle on it where if someone means business, it's another way of saying they're serious. But it also brings in, sometimes when people talk about creators, they're like, oh, you're just making content and all that for fun. And most creators that you and I know are like, no, we're running businesses. And so to be able to get both play on the words there of like, this is for business, And then, you know, for creators who mean business. So there's these little things that take really a lot of time and effort to get to from a copywriting and positioning perspective. But it's something that has paid off really, really well.

So what's your perspective? Do you think the kind of the adherence and following those guidelines will kind of fade over time and people will just stop caring, like people in your marketing team? Or do you think they will just get used to a certain kind of tone and style and it would be maintained throughout?

Yeah, I think it'll be, it'll be maintained. The other thing that's amazing is doing all of this at once means we have fantastic documentation, right? And so as we bring on a new product marketer, they can say, okay, how do I represent this brand? And we have all of this, like, this is exactly how you do it. And then these latest employees that we've hired, are AI, right? And so if you're asking AI by default to say, hey, write this in my tone of voice, it's like, okay, what's your tone of voice?

Yeah.

Or it'll write something and it'll use all of these $5 words and all this. It'll try to sound too smart and everything else. But if you just spent a month or more on all of your messaging and positioning and getting it dialed in and you have that in a Google Doc, we'll build a Claude project around that and it will do a very good job of following your brand guidelines and writing in the voice of the brand. And so I think that doing a project like we did is, is necessary when you're trying to build a brand of our scale, but it's even more valuable now in the world of AI because you can perfectly, very, very easily perfectly train, uh, on that. And if you're switching, you know, first I did it in ChatGPT, but then I liked Claude better as a writer. And so instead of like retraining something, I just go and grab the same documents on our brand guidelines, upload it, and we're good to go.

Well, AI use case is so good. I can't believe I didn't talk about it because it does make so much sense. You have a document with a lot of examples where you're explaining what needs to be done and you can just easily cross-reference. Yeah, because when I, when I asked you about the adherence to the guidelines fading, I thought that people would need to kind of manually kind of go through this document and remind themselves what it is. But you don't have to do this because the document can already be in your kind of AI helper. You just write a draft and you say, can you like polish it according to our style? It does it. You like edit it and it's good.

Well, and I think that all of these things, all this information being packaged and portable is even more important in the world of AI. Because one example is, uh, as a brand, we tell a lot of stories. We want to make creators, our customers, the heroes of our brand, right? We want to be the guide helping them achieve their business, but we're really showcasing them. And so through that process, we've, we've done over 100 interviews and told stories of these creators. And that can be this whole thing to try to unlock and unpack and find stories. So if I'm writing an essay or working on a book, Well, I'm like, I'm always looking for, okay, who's an example of a creator who worked consistently for 2 years and only after that amount of time did they like achieve a breakout success? And I used to ask Isa, our storyteller, for those questions. She'd be like, oh, you know, here's 3 examples. But what she did is we worked together and we used Google Notebook LM to ingest all of our stories. It's like, I think almost 200,000 words of content.

Whoa.

And then I gave it all of our brand voice and messaging and all of that. So I'm able to pull these documents together and put it in one place. And now I just ask it and it, I ask NotebookLM, like, what's the, you know, who are creators that meet this? And it'll gimme 5 examples from our material and it'll cite the sources. But then because it has the brand guidelines, I can say, okay, now rewrite this. Succinctly for this use case. And so I think that every brand, whether you just did a giant rebrand or not, it's really worth getting these portable documents for all your messaging guidelines, how to show up as your brand, all of these, like write like this, not like that. That's so, so important because then not only can you train your team, but you can train your AIs on it.

Let's switch gears a little bit. I like the story how serendipitously You got the kid.com domain.

Yeah.

Can you tell the story real quick?

Yeah, so when you're rebranding, a lot of times when a company rebrands, they have tons of options to go to, right? They're searching, they know their old brand doesn't fit where they're going. It's time for a new brand, but that you're really looking for this intersection of something that fits where we're going long-term, is interesting and engaging. You can get the.com, right? You're not gonna rebrand a, $45 million a year company and go to the.io or AI or whatever, right? You need the.com. And so, but usually you have lots of options. But in our case, we had rebranded once before and it had not worked. And so we knew that if we were gonna rebrand again, it had to be something that was an easy switch from ConvertKit. It had to be very natural. And so that really only left us with Kit. And so it's kit.com. Here you have a 3-letter English.com that cannot be misspelled. There's some of these words where you're like, hold on, which synonym or homonym did you mean? Or any of that.

How do you spell A-H-L?

Right. But kit, everyone's like, okay. A weird thing though, people don't believe me that that's our domain. So I say my email address over the phone like, oh, Nathan@kit.com. They think they misheard because they're not like, they're not immediately thinking like, oh, you have a 3-letter dot com, right? It sounds almost too good to be true. I didn't expect that one. But in this case, we're trying to buy something that there's exactly one of. We're trying to buy kit.com. And over the years, it just wasn't available. And it had been passed from company to company and through acquisitions and a few of those things. And it actually just came up for sale. Brendan, who's our director of engineering, had been keeping an eye on it. And one day on an exec call, he's like, hey guys, kit.com is now a domain sales page.

Not even you, your director of engineering.

Yeah, because he had been on this thinking, okay, we've got to, at some point, if this ever becomes available, we got to go for it. And so we reached out to them, negotiated a price, and it was pretty straightforward. I think that it was November of 2023 when we started the conversation with them and we had a deal ready probably 3 or 4 weeks later. And then where it's all negotiated. And then there were just some terms, like they still needed some carve-outs of like they had shipped some physical products that had a subdomain in it, like the activation link. And so it was basically like, hey, for a year, will you guys keep these DNS records active for us? And that kind of thing. So the domain itself was actually pretty straightforward. What got more complicated was getting all of the other assets, social media handles, trademarks, all of those other things, because kit.com was the most important thing. But even as we pursued other names, we usually find like, okay, if we get the.com, We can't actually buy the trademark. Like someone else owns a trademark in the SaaS space with that same, that same term and, you know, all of this other stuff. And so it got really hard. But wildly, we were able to get the Instagram, TikTok, Facebook, YouTube, and X handles for just 3 letters.

Kit.

All 3 letters, just @kit.

Wow.

And then we were able to also buy kit.co and Kit trademark. So that we could operate, you know, as marketing software under, under Kit. And so to be able to pull that off was wild. I did not expect that it would work out that well.

It's crazy. We fought to get Ahrefs on Instagram because someone snatched it. And yeah, thanks to being an advertiser, it helped us to kind of reach out to our account manager or whatnot. And we said like, if we had our brand name, we would invest more money. And they were like, well, yeah, it makes sense. So, right, let us give it. You said you cannot disclose how much did it cost you, but you said it was a good deal.

Yeah. So the way that I describe it, well, first, when doing the deal, we're public about everything. You know, if you want to see our revenue numbers in real time, you go to kit.com/metrics and you can see, you know, our ARR exactly today as it is and our churn and everything else. And I always thought, oh yeah, we'll tell the whole story of exactly how much the domain cost and the whole rebrand and everything. And I was going through the contract to purchase the domain and it had a non-disclosure agreement in it and I actually took it out. I redlined the contract, took that out and they put it back in. And then I was like, okay, I thought it was kind of a boilerplate thing. And so what I did is I said, all right, we won't disclose the purchase price for a year. And then the broker called me and was like, hey, if you want this deal to happen, stop messing with the NDA. They will not budge on it.

So you can never—

So I can never disclose the price. The one thing that I can say is if you don't know the world of domains, you would be like probably shocked and horrified at how much money we paid. On the inverse, if you know the world of domains, you would be shocked at how little we paid. So it's a long way of saying it was a good deal.

You know what kind of metaphor I have in mind with domains and businesses? It's like engagement rings and wives. So the narrative goes is that with the price of engagement ring, you're kind of showing how serious you are to this kind of relationship, to this marriage, to this woman and all that. And I remember, I think maybe it was Noah Kagan, he was buying Sumo.com or something.

Yeah, he paid $1.5 million. Yeah.

And he literally said, this shows how dedicated we are to this business, how kind of bullish we are on it. We believe in it. We're going to work on it. On it. This shows our commitment. And I think it kind of holds true for businesses as well. If you're willing to invest so much money into like a 3-letter domain, then it means that you really believe in your company and vision behind it and where it is going. Does it make sense?

Yeah. Oh, absolutely. I think that in a world where people are trying to build companies and they're looking for a quick exit or they're saying, hey, we raised all this capital and 3 more years and we're going to sell the company or whatever. It's the exception when people are making these really long-term plans. And actually, I made a bunch of decisions last year that if I were trying to sell the company are not the right decision at all, but there were these long-term dreams that I wanted to come true and there's 4 of them. The first one was renaming the company. And I always thought that ConvertKit as a name was limiting. It sounded just like marketing software, but I wanted to do much bigger things. I wanted to build a brand all around helping creators earn a living and helping them build really valuable businesses. And so I felt like we needed an aspirational brand around that. So renaming was the first one. We pulled that off. The second one is I always wanted to make a really generous free plan. I admire companies like Notion and Figma where they're very heavy on product-led growth and Figma especially, they've changed this a little bit, but what they do is they have these, you basically get to use professional level marketing tools for free. And so if you imagine the 14-year-old designer Growing up in the US or anywhere in the world, like, you know how crazy that is? That you can get on a, it could be a Chromebook and you get on the internet and you get to just use Figma. Like that's the tool that they absolutely best use. And so I love that idea of just being widely accessible to everyone. And so when we rebranded, it was at a time when inflation was rampant. And so basically every company was raising prices. Customers were annoyed, but they understood because just everywhere you looked, things were getting way more expensive. And we assumed that— actually, we did some customer interviews where we talked to our customers about the name change, their reactions, all of that, just as we learned. And they're like, oh, you're probably— this means you got to raise prices, right? That domain was expensive. And so we said, okay, not only are we not going to raise prices, We're going to take this opportunity to make our free plan insanely generous. And so we went from 1,000 subscribers for free to 10,000. And then we added automations into our free plan. And then we added our creator network feature where you can connect with and recommend other creators into our free plan as well. And so that was one where from an MRR perspective, it's not the right, not the right move, uh, at least in the short term, but in the long term, I'm like, okay, how do we make it so our product is ubiquitous? And everyone signs up for it and you get to, you know, when you get to use the kit.com domain. So like I have nathan.kit.com and, and all of that to run your newsletter. And then the last one that I thought like, oh man, I don't know if I'll ever be able to pull this off is I wanted to build in-person creator spaces. And I had actually pitched the team on it in 2018. At a team retreat where I said, hey, we're going to build these spaces where it's going to be like, uh, coworking, coffee shop, kind of like an Apple Genius Bar type setup, and then recording studios for creators to use. Uh, it ended up that the recording studio is the part that's actually the most useful and like most unique, right? Coworking and coffee shops, there's tons of those. But this last year we ended up launching our first Kit Studios, which is in Boise, and it's 5 studios all in one space. And there's a community area and conference room and all that. And it's just available for our customers to use for free. We just launched one a couple weeks ago in Chicago and we're working on New York. And so the idea is sort of the Amex Centurion Lounge of creator spaces. And as a member, as a customer of our software, you just get access to that for free. And so that's a long way of saying that there's a lot wrapped up in this Kit rebrand, and it's basically taking my dreams for the last 5, 10 years and bringing them all to life immediately.

I want to go back to documentary series that you've done to basically document how you were doing rebranding. This is essentially a marketing campaign, right?

Yeah.

So I have two questions in that regard. First of all, how did you make decision to kind of invest time and effort to do it? And secondly, how do you know it was worth it? Did you try to measure ROI or something, or how do you tell your team, okay, this was a success or not?

Yeah. So when we were thinking about doing this big rebrand, you need to make sure that your message is actually landing and that ultimately you're telling stories. You're trying to tell the story of why you switched, what this new brand means, and what people should expect going forward. And often people do that, they're going to put a lot into their homepage copy, the brand positioning, and maybe they've got some killer announcement video they've edited down to 90 seconds and that tries to encapsulate all of that. And that's really hard to tell, to communicate the level of information that you need in that condensed amount of time. And so we have this value at Kit of work in public and just share the journey, share the process. And so you don't have to necessarily go create brand new content. You can just document what you're doing. And so that was what we did is said, okay, let's bring our customers along for this journey and let's release this 4-part documentary of talking through every aspect of it. And we included recordings of when we talked to our customers and their reactions and all of that. And it ended up being absolutely the right thing to do because you'd see these comments on social media where someone would say, Why are you guys rebranding to Kit? That's so stupid. ConvertKit actually meant something, but Kit is just meaningless. And then there'd be a reply from another customer who would say, you know, I actually thought the same thing. And then I watched episode 2 of their documentary linked right here, and I got it. And then you'd see the reply back from the first person to go, oh, that makes so much sense. I had no idea where they were going with this app store. And building this whole app store and ecosystem and that, the idea of what is your kit as a creator, what tools did you assemble to run your unique bespoke business? Oh, that makes perfect sense. And so we're just like, yes, the documentary is working, right? Because we had so much bigger of a canvas to tell the story of why we're doing it. And so then when customers would reach out and go, hey, when is the next episode of the documentary coming out? We're like, all right. We've done that well. And then I've also had so many brands, so many friends who are CEOs or CMOs of brands, so they're like, actually, we want to rebrand and we want to know what's been going on. We've talked about it for years. One, thank you for writing all of this in detail of how you did it. And then two, can we ask you a couple questions because you covered this in episode 3 and that was super interesting, but Here's 5 more questions. And I just think that's the best kind of marketing is when you build your business and live your life and do it in a way that provides value for a lot of people.

I really like how you frame it. And the reason why I asked this question in the first place is that a lot of time what I'm seeing kind of online on Reddit from discussions, what marketers are discussing, is that marketing has to prove its value. Like how is your value, how is what you're doing driving value to the business, how it is helping your business grow. And they want those metrics, they want attribution, they want to tie it to the—

What's your return on ad spend?

Yeah, yeah, yeah. Like what is the ROI? So what is the ROI of doing this documentary? And you cannot track like, I don't know, someone would say let's track, I don't know, customer churn. Let's compare if people who watched the documentary are churning less than people who didn't watch the documentary or stuff like this. But what I'm hearing is that you didn't bother about any of that. You just kind of applied logic and common sense to say that this kind of campaign, which, which required a lot of effort, as far as I can tell, because the videos are well-produced, you have a whole section on the website about this. You have to fly people around. They have to document. There's a lot of work. Which could be spent elsewhere. There's opportunity cost to doing this, this kind of thing. And what I like is that you track value of this thing by kind of secondary indications of what you see people saying in comments and what you see people saying to you when you reach out to you.

Yeah, I want— we have 60,000 paying customers for Kit. I want to equip as many of them as possible to be able to tell the story of our brand and to say, this is why I'm a customer. This is why you should be too. And it takes creating content. It takes storytelling. If you're just saying, here's our homepage headline, here's our marketing copy, all of that. And then you overhear a conversation and it's like, oh, why should I use— you use this tool. Should I use it too? And they're like, I mean, yeah, if you want to, it's been good for us. And they're like, they don't have the words to explain why this matters. You've just done a huge disservice to your brand and your customers.

This resonates like crazy with me. So a small spoiler, I'm in the process of writing a book about marketing and kind of laying out our strategies, how we were doing marketing at Ahrefs. And equip customers with the talking points is one of the kind of larger concepts of strategies that I, that I'm going to discuss. And this is actually people talking— are talking a lot about word of mouth, like word of mouth marketing. How do you make your people, your customers talk about you to other customers? And what you're saying resonates so hard with me because you're equipping them with the talking points. So one big thing for us early when I joined Ahrefs, maybe a year in, I found a study by, I think it was a hosting company or something. They measured the activity of different web bots and they put Ahrefs second after Google. So we were the second most active crawler after Google. I was like, wow, this is a very solid talking point. It's memorable. It's cool. And they started putting it everywhere in our marketing. Like we're writing an article, I would make sure to mention it. We're going to the conference, I would make sure to mention it. And then I kind of saw what you were seeing. I'm seeing on Reddit and someone asking a question like, so how is Ahrefs better than those other tools? And someone is like, they actually have the second best crawler after Google. I was like, wow, this, this thing works. So yeah, I love that you're— I love that you kind of understand the mechanics of how your documentary works to equip your customers to talk and spread the word about your business.

And we say word of mouth marketing. And what we mean is, you know, customers talking about your brand, but what are the words that are going to come out of their mouth? And you can equip them with that. You can say, this is what you should say. And I wish that people, instead of just thinking of word of mouth marketing of like, okay, we're going to have a great product. Uh, we're going to make it resonate in some good ways, all that. I wish they were very deliberate and They thought about what is the conversation that I want to overhear? I think about this all the time with book positioning. When is this book that we're creating going to be recommended? And what's that conversation that I want to overhear? I think about Dan Martell's book, Buy Back Your Time. I imagine two entrepreneurs talking and one of them is saying, oh, I'm overwhelmed. Like I just, I can't. Get all this going. I feel like I've, you know, at the point the business is making $10 million a year, but I still feel like I'm stuck in the weeds. And the other entrepreneur saying, oh, have you read Dan Martell's book, Buy Back Your Time? It's about exactly this, right? And so you, you can imagine that happening. And I want that for software. I want it for our products. And same thing that you want, where you're imagining a creator saying, okay, I'm, my business is growing. I didn't know you could make money as a creator, but now I'm trying to figure out where do I go from here? And then, you know, their friend can say, oh, actually Kit is for creators who mean business. It sounds like you're ready to take this seriously and you need to go to a platform that's going to do that and you need to be surrounded by other creators. And so it's, it's basically how can I feed these talking points? And you can't, you know, write a script and be like, Hey Tim, when this comes up, say this. But through all your marketing and storytelling, you can effectively do that.

Yeah, yeah, I love this. So one thing you said, I think in that documentary, watching people react to kid brand versus ConvertKit brand, different level. So I wanted to get some details, like what exactly did you observe?

Yeah, it was fascinating. We've always had high-level clients on ConvertKit, you know, whether it's like James Clear and Tim Ferriss, Huberman, Tim McGraw, like all of these people. But I think as we went into some of these conversations, I'll give you an example. We were talking to Matthew McConaughey's team and right as we were working on the rebrand, but nothing was public yet. So this is like January 2024. And so we were, we were ConvertKit in all of those conversations. And as someone new would come into the conversation, you know, from his team, they'd be like, okay, cool. That's the software that we're using. Later on in the process as we continue, because these things take time, we had rebranded to Kit and I got to watch his head of PR come in and it was like, oh, Kit. And like, she was so excited about Kit and where we were going and the brand, like her reaction was totally different. From like, oh, there's a tool we're using to, oh, this is the cool thing that we want to be a part of. This is the next wave in newsletters. And so people reacted completely differently. And it's partially the conversations we got in, partially the rebrand and how we were showing up, a bunch of factors. But we ended up doing this ridiculous run of celebrity newsletters where in a 3-month period after rebranding, We launched newsletters for Lil Jon, Ellen, Morgan Freeman, Tom Brady, Matthew McConaughey. It kept going. And so it was fascinating watching people treat the brand totally differently because of how much we elevated it from a marketing tool to actually a movement serving creators.

Wow. The power of brand. Yeah. Case study. Another question I had is about your homepage redesign, because you took a very interesting angle where you were showcasing your clients instead of showcasing your software. And you kind of, you tried to show the use cases of your software through the kind of case studies of your clients. But my question is, again, back to data because marketers online are super data obsessed and I'm sure a lot of them would ask you, did you A/B test this?

Yeah, we definitely did.

Okay.

And so we've taken a few different approaches over the years. Sometimes we've gone very product focused. And so someone comes in, they're like, okay, immediately I know this is a software product and it helps me grow my list and automate and I can see it. Other times we have gone very messaging, value-driven, very brand-driven in that sense. And where we've ended up both through our own style and then also a bunch of tests is really to split the difference and to say, here are the, like we said earlier, make creators the heroes of the brand. And so here are the creators that use the platform. And so you immediately get that trust. You come to the homepage and you're like, okay, James Clear, you know, who wrote Atomic Habits, the bestselling book of the last decade, basically, he uses Kit. And you see, I think on the homepage right now is Nisha Vora, who is a vegan food YouTuber. And in her photo, she has her gold play button from YouTube.

Right?

So you immediately, if you know anything about a creator, you instantly know, oh, she has a million subscriber YouTube channel. We don't need to explain anything because it shows up as a visual. Someone else outside the world is like, I don't know, some, someone with a plaque, right? But if you're a creator, you immediately know, oh, that is worth a lot. And then we try to go through the page and really say, this is how Nisha or James or like Justin Welsh, I think is on the homepage right now. This is how they use Kit. What's in their Kit? And it's that same storytelling idea. And we're constantly testing, okay, should we go a little more story or a little more product? And we run some of those different angles. But I think we've got a pretty good balance of it right now.

So what was the A/B test?

So there's been a bunch of them over the years, but one of them was like pure product versus pure storytelling and name recognition and sort of this like, "Andrew Huberman uses us, so you should too." And then now the A/B tests are much smaller and they're things like what resonates better if we lead with the product or we lead with the people. And so those are a lot of the, a lot of the changes. Okay.

I can think at least of at least two types of A/B tests. One is focus group A/B test where you like show different versions to people. I know on a Zoom call and you just talk to them and see their live reaction and the kind of clicks or conversion A/B test where you use— there are a bunch of softwares where you can do it. So which one did you do?

We did both. Early on when we're doing much bigger directional things, should we go more this direction versus that direction? It's going to be a lot more of the qualitative reactions. You're talking to 10 to 20 people. And then when we have some more of that direction and you can actually build out the pages and put them live, then you say, all right, we're getting however many tens of thousands of visits a day. Let's see which performs better.

So let me get this straight. You A/B tested the version of your homepage focused on creators versus the version, I know, focused on your product, kind of more conventional one. And you saw what, more signups?

Yeah, we saw. So we track, you know, clicks through to the signup page and then conversions to free accounts or like who creates a free account and then conversion to paid. And some of those tests weren't super crisp, you know, where you're like, okay, this is clearly the winner. And in that case, then we just say, okay, if the results aren't statistically significant, what's the one that better aligns with our brand values? There are times where you're like, I want this one to win and the other one wins and you're like, dang it.

Thank you. This is exactly where I was going with this because this is my common kind of issue with those A/B tests, because if you have a vision for what you want to say on your homepage, how you want to position yourself, and you run an A/B test and it doesn't perform well for like driving clicks to pricing page or whatnot for signups, but you really believe for that vision in long term, should you abandon this vision just because like it didn't give you like clicks that week?

You should try to see what you can learn from it, right? And I would run other tests. Was it your design? Was it the copy? Was it, you know, did your traffic change that week? Any of those things.

That reminds me of a quote. If you torture data long enough, it will confess to anything. So you can test until you see what you want to see.

That is a very good quote. I love that one. The way that I think about it though is I think the biggest reason that businesses fail or don't achieve their potential is that the founder or the executive team loses interest and they, they burn out, get distracted by something else, whatever that is. And there's a lot of people who take such a data-driven approach versus a vision-based approach. That they end up running a business that they're like, eh, I don't really love this. And I'm like, what do you mean you don't love it? And they're like, well, if I could do whatever I want, I would do this other thing. And I'm like, you're the one in charge. You can do whatever you want. And so I think about what are the decisions that are going to keep you in love with this business, with this brand, to be able to do it for a very long time. I have a ton of respect for Ben and Dan who built Mailchimp. They worked on that business, I think, for 21 years. And I was talking to Ben Chestnut, the CEO, at one point. And if I'm getting this right, I think that 8 years in, they hit $1 million in annual recurring revenue. And that was when they launched their free plan in 2009, 2008, 2009 time period. They've been doing this business for a long time at that point. And then they just had this exercise in compounding. Right. Where they just kept putting up bigger and bigger numbers and kept growing and growing. And I think that what you have to do as a founder is build a business that you can get that compounding for a very long time. And so if you're trying to decide like, oh, in this moment, do I go with my vision and my idea for this brand and all of that? Or do I go with the winning A/B test? I would play both of them forward. One of them is going to keep you in the game for years, maybe even decades. The other one might take you down a path of, I don't know, I kind of lost interest in this business. I don't love the brand. I don't love the customer base or whatever because we just kept chasing the next logical dollar instead of chasing a vision.

Yeah, the vibe that I'm getting from you with the rebrand from ConvertKit to Kit, it kind of reinvigorated you and you're so excited, you're so passionate about it. It's almost like, I don't know, starting a whole new company with like bright future. So I can actually feel from you that you have a lot of energy and a lot of passion.

What I always think about is what's the gap between what you believe you should do? If you could have anything you want, what would you do? And what you're actually doing. For me, those were pretty far apart. Where I had, you know, I wanted to change our free plan, but we needed revenue, right? We're a bootstrap business. That's a dangerous move to make your free plan 10 times more valuable. I wanted to build an app store, but like, that's a huge undertaking, right? You think about the amount of work and building an ecosystem, the team you want to hire and all of that. I want to build these physical spaces. I want to rebrand the company. Like all of these things, there was a big gap between what I wanted to do and what we actually could do. And what I realized is this, you have one life, live it the way that you want, spend your time going to make a dent in the universe in the way that you want. And I think over the last 18 months, I've just everywhere possible closed that gap where there's still a gap between what we're actually doing and what I want to be doing, but it has gone from being quite wide to quite narrow. And now it just comes down to logical things of like, okay, I can't do everything at once, so that will wait until we unlock this milestone. I only have 2, soon to be 3 podcast studios instead of 5 or more. And it's like, no, we'll build out the business methodically rather than do it all at once.

Let's talk about your marketing more generally, just outside of the podcast. The, the rebrand and what we already discussed, uh, is your marketing— are there any other kind of fundamental changes in how you approach marketing, how you approached it for ConvertKit versus Kit? Are you adding any new strategies? Are you investing more in certain campaigns over others? Are you going to, I don't know, rebuild your marketing team somehow? So I wonder, the, the, the rebrand from ConvertKit to Kit and this bigger vision, does it change kind of your marketing engine as a whole?

There's a few things that change. So first, ConvertKit was a product that you acquired as an individual user and you did your own marketing with it. There was no network effects or that sort of thing. It didn't matter who else was on ConvertKit. So if we had a mastermind group, if like, I don't know, 4 or 5 of us are all creators, and one uses ConvertKit, you know, I don't know, you use MailChimp and someone else uses MailerLite and then the last one uses ActiveCampaign. Like it doesn't really matter other than the fact that like the way we each implement an automation is gonna be different. With Kit, we have the creator network. And so you can actually like go and browse this network of creators, choose who you wanna partner with. You know, you can recommend them, they can recommend you, back and you grow together. And so what it means is that in any given niche, who is on the platform matters substantially, right? Because you can't partner with someone else, right? In that same mastermind example, let's say you and I both use Kit and our two friends use Mailchimp and ActiveCampaign. They, we, you know, we're talking about the growth that we're getting because we're partnered up and we're working faster. And they're like, we, we want in on that. And it's like, you can't. Unless you're on Kit. And so the big marketing shift has really been around, we've always done it, but this idea of making creators the heroes of our brand and really showcasing who is on the platform. And so we were working with this popular YouTuber who we'll announce really soon who it is, but tens of millions of subscribers on YouTube. And as we were working through it, we backchanneled with a bunch of our creators and said, "Hey, we're working to get this individual over. Will you reach out?" would you be up for collaborating with them if they could launch on Kit? And we were talking to the COO of this creator's company and he said, you know, based on everything I'm hearing, I'd have to be an idiot. And I'm like, it's always one of those things where you're like, where's the sentence going? You know, it gets to that point. I'm like, is this good? And he goes, I'd have to be an idiot to use any platform besides Kit because everyone that I trust is on and recommending the platform. and it made making that sale so easy because of the community. So I think the big, the biggest difference between our marketing as ConvertKit and our marketing as Kit is really showcasing who's on the platform, why they believe in it, and the power of it. Uh, and then there's lots of things that, you know, we used to do years ago that we're bringing back, uh, like direct sales. That's something that I built the whole business on in the early days, and then I moved away from. And now it's just, it's so impactful to land these big customers one by one. And then there's other ones like webinars are another big one, you know, and doubling down on our affiliate channel to basically to bring this new brand to life.

Let's dig a little bit into those direct sales because again, yesterday at the dinner, I think it was Eric who specifically asked you, how do you get those big customers? Like, do you just I don't know, flat out send email to, I don't know, Arnold Schwarzenegger's team. Hey, do you guys want to move to Kit?

Right.

Like, you, you need to surely do something else to, to land those big name customers.

Yeah. So in the early days, that's what it was, right? A lot of cold emails and you work your way up. Now it's making a connection between, you know, who you want to have on the platform, maybe a particular niche that you're going after. And then listing out all those people and then figuring out what introductions can we get. Like for example, just before this, I was having coffee with Ben Rawitz, who is Tom Brady's manager, and I've known him for a few years. We've worked to bring Tom over to Kit when he launched his newsletter, and that was a fun moment because he launched his newsletter tied in with the Super Bowl when he was the announcer of the Super Bowl. And so it got a crazy amount of growth and traction. but I will then lean really heavily on our network. So if we're trying to recruit someone over and then, then I'll be asking around, hey Ben, do you know who runs this person's? Do you happen to know their manager or all that? He's like, oh, I don't know them, but like, here's the company that's behind it, or here's those things. Or if I'm trying to reach someone, I'll do it through connections to someone else. And I'm like, okay, do we go agent? Do we go manager? Do we go direct to the creator depending? And usually someone I know has a connection there. And that's another reason that I do my podcast is I end up in all these conversations with creators who know other creators. And so often then I'm saying, hey, could you, would you be up for reaching out to this person seeing if they'd be up for an intro? And that makes a really big difference. The other thing is one of my favorite topics is flywheels. And it's something that people talk about all the time as like this abstract word. I was at a newsletter marketing conference and I was like the closing keynote for the day. And every single talk included the word flywheels leading up to that. But I don't think that people actually know what flywheels are. And, uh, and we can get into that if you want to, but, um, The, I think a lot about a direct sales flywheel and how do you do these activities like one-to-one outreach that makes it easier to get more customers. So for us, I'm like listing out target customers. I'm trying to get on calls with them. And then we're doing this custom migration to bring them over, make sure it's a huge win, clean up their automations, like level up their email marketing through this like very hands-on migration. And then we're asking for the testimonial and, and all of that. Can we use them in our marketing? And then we're asking for the referral. Hey, who's someone else that, you know, could be in a mastermind group or whatever else that we should talk to? And that brings us around the flywheel again. And what it means is you get more and more customers who are referring to you over time and able to drive so much more of this. And, and then we also have the network effects, right? Like the more customers we have, the more valuable it is for each individual customer. Because then they can recommend each other and all of that. So yeah, there's, there's a ton in there.

Yeah. Network, network effect for your clients is definitely a great value add. But can we disclose the largest annual contract size of your customers?

Yeah, it's about $60,000 to $70,000 a year.

Yeah. So that leads me into question. It seems— correct me if I'm wrong, but you seem to be very personally involved Yeah. In selling to those customers.

Yeah.

Which means it doesn't necessarily scale very well because with the $60K per year annual contract size and CEO doing sales, like how much can you really sell in a month versus, versus building sales team that works without you? Implementing some kind of flywheel scaling that. So what are your thoughts on this?

Yeah, well, first, if you're going for marketing and sales advice, there's probably someone much better to give it than me. We've done really well in building Kit, but at the same time, I don't know, we're still a long ways off from our full potential. But I think that so much of the business is relationship-driven and I always think of the Paul Graham quote where he talks about, "Do things that don't scale," because I've seen over and over again when you do things that don't scale, it enables channels and these methods that do scale. One thing I realized about our business is if I had a traditional small business and we absolutely crushed it for a couple of clients, then they would go and tell their other business owner friends in the local chamber of commerce or whatever else, right? And we'd get this network effect and it would gradually spread from there. With creators, they go tell like 10,000 of their closest friends, you know? And it's just the reach from that is just wild. If they leave the Powered By link on the bottoms of their emails and say, oh yeah, we love Kit, we'd be happy to do that. That's a big deal. Like we've had, big name professional athletes reach out to us cold and say, hey, I would love to work with Kit. Tell me what you guys have going on. And we're like, oh, how'd you hear about us? And they're like, we just saw that Tom Brady's newsletter was really good and we saw Powered by Kit at the bottom. And so we reached out. And so it's very, very scalable to land these one-off clients. Now at the same time, we really spent time building out a small sales team. And so we have a 5-person sales team and they have different focuses, but like one person on our team, Maggie, her entire focus is agencies. She's saying, how do I not get an individual creator on the platform, but how do I get an agency and teach them, do trainings for their team, all of that, so that then they're bringing over all of their clients. And then how do I get, you know, in my, my agency flywheel, how do I spin up more and more agencies so that I'm getting Maybe it's only 1 lead a week from each agency or 1 lead a month from each agency, but then if I can get 20 of these agencies that are continually onboarding new customers, then I've got almost like 20 sales reps out there who are closing deals, servicing their clients, and continually bringing new clients to us. One that we just launched is Dua Lipa. Just launched her newsletter on Kit, and that one came through an agency that, you know, we developed over time. And so you get these conversations where you're like, wait, how are we in this conversation? Like, my inbox is just starting to look ridiculous. And it's basically these flywheels that we've built up over time and now are really starting to build momentum.

Well, yeah, that explains because when you're personally involved in sales, it's not just the $60K per year client that you're getting.

Right.

It's all the kind of network effect and all the clout that comes with landing the person. And yeah, like you say, if someone like Tom Brady leaves powered by ConvertKit even for a couple of weeks, that, that's huge exposure that costs a lot more than just $60K that you get from him. Last topic, because we're running out of time. Yesterday at the dinner, you said that you love and kind of feel you're good at building teams, building processes, building systems. And I actually have a screenshot of one of your articles in my kind of folder with some things I want to remember and come back to. And it's about how you delegated a lot of the work that you used to do yourself, but you understood that this just doesn't scale and you try to offload as much of it as you can to your team. So In that vein, I wanted to ask you, like, what are your— some of the kind of most successful or most effective processes that you implemented kind of within your team, marketing related?

Yeah. So I think as a founder, there's a lot of content that you want to create, and that can consume any amount of time that you allow it to. and because of my background as a, as CEO, content creator, uh, I know the product inside and out. You know, a lot of times when we would do product marketing, I would be like, okay, what's the video going to be? How would we do this? And then you gotta set up the lighting. You, you gotta do all of these things, right? And we've got it down to the science where now once a quarter we do a recap video of here's everything that we've released in the product. And so now my team writes the script for that. And they have a custom GPT that takes all of our feature releases and they flag the most important ones and it writes a script, which then they work from and you're like, all right, what do we actually want to highlight? But it saves a bunch of time. And then we have these beautiful studios. And so I just sit down and hit record, you hit a few buttons on the wall and all the lights, the camera, everything comes on perfectly. So it took what used to be 30 or 40 minutes to dial it in and all of that, is now 30 to 40 seconds. The script goes up on the teleprompter, I record it. If I miss a line or any of that, I just back it up. I don't start and stop, editors can fix that. And so it really took this thing that used to be probably half a day of work for me and drops it down to 15 minutes to record this 7, 8-minute script. And then it goes out from there. So that is a very simple flywheel that just runs every quarter. I know that my team's going to drop a 30-minute block on my calendar sometime that I'm already in the studio recording and I'll just knock that out. And so there's a lot of those things where I used to be doing a lot of that and now I'm able to get the same, better quality and still have my voice and face on it, but really not invest very much time at all.

In terms of team management, I wonder what is your kind of philosophy or processes? What is your take on, I know, reporting, planning meetings, again, tracking things like ROI, budgeting. So how does your marketing machine work in that regard? How kind of bureaucratic and how calculated and how numbers-driven it is versus this is the thing we believe in, this is the thing that we want to do. Let's do it, let's publish it. And that's about it.

I think you have to have a blend. If you go too much one side or the other, you're just going to end up causing a lot of frustration. And so, for example, I always try to write down an assumption of What would success look like? So we're publishing a video, let's say the documentary series, and I don't remember the numbers, but we would write down what does success look like and the qualitative and quantitative. Not that we're going to be like, oh, this is a failure, cancel it, if we said, oh, we want 10,000 views and it got 7,000. But you just want that benchmark because you want to be able to calibrate over time your own assumptions. So that's the first thing. The second thing is I think it's really important to narrowly focus on a few key initiatives and really build a reporting function around that. I used to build a lot of features and then we'd launch it and be like, okay, who started using it? All of that. Cool. Next. And we'd, we'd move on. And now with our core initiatives, we have a weekly meeting where we get everyone who's working on that. It's very focused and we meet on it. We review the metrics. We don't do OKRs for the entire organization, but we do these objectives and key results for these core initiatives. So the 4 that we have are our app store, our creator network, activation and onboarding, and then revenue. And so it has that consistent accountability for each person. So on the app store, for example, we're talking about What apps have we released? What new endpoints have we built? How's the adoption, those metrics? And we just have that 45-minute meeting once a week. And actually another thing that we do is we have a 15-minute meeting after it that's just the execs. And so then we can say, okay, but how is this initiative going at a high level? And we can cover all our action items there and any changes to make. And so in That 4 hours a week of meetings, I feel like I have a strong pulse on the business. People are reporting on the key metrics and staying really focused without us getting bogged down trying to instrument and measure every single part of the business. Another good example of this would be our creator network initiative where we're trying to see how are creators finding each other, recommending. And what we found is that reciprocal recommendations mattered. If I recommend you, how likely are you to recommend me back? And can we influence that in the product? And so we found that we were sitting about 11%, uh, reciprocal recommendations. And so we made, for an entire quarter, we made that the number one goal. And so the product team just obsessed over how can we increase that number? And so you're thinking about, okay, can we do smarter email notifications? Can we change the UI? Like, you know, how do we make sure that the first recommendation is higher quality so there's a better match and all of that? And at the end of the quarter, we were at 21%. And that has a huge impact in the business. And so we'll pick things like that where one team just obsesses over a metric and they just keep iterating until, until they hit that.

That pretty much wraps up our interview. Nathan, thanks a lot for taking the time. I really enjoyed and learned a lot today.

Yeah, thanks for having me. I'm always down to chat marketing and business and all of that.

Thank you. Thanks a lot for sticking till the very end of this episode. I guess that means you enjoyed it, right? Because if you did, I have to ask you to subscribe to this YouTube channel, or maybe click the "follow" button if you're listening to this on Apple or Spotify. Not sure if you know this, but subscriptions and follows are the strongest signal for these platforms to show this piece of content to more people. So I would really, really appreciate it if you would follow and subscribe. Thanks in advance, and I'll see you in the next episode.

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