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At Microconf 2014, Nathan Barry, Founder of ConvertiKit, spoke about how practice and the willingness to learn can make small businesses grow impressively.

The video can be viewed here.

Transcript
Nathan: There is a lot of talks here on really really technical things and right now, I’m not going to give you, you know, one weird trick to double your conversion rate or anything like that, but I am going to talk about the things that really made a difference for me over the long term. So we will step right in. If you want to get good at something, what’s the best way to do that? Practice, yeah; like practice – sometimes, practice for a few hours a day, you know, one day a week, may be work on your product, a couple of times a month when you get inspired and you have all that motivation. I don’t think so, but we’ll get into that, but there is this idea that if you want to get really good at something, you should practice it continually, and so, Jason Fried of 37 signals or BaseCamp now, has this idea that just like you would learn to play the drums by practicing, you would learn to make money by practicing’ that it’s a skill! The more you do it, the better you get at it. So he has this story of the first time he got someone he didn’t know to pay him money, and I think that is truly a critical moment in any person’s career of selling things. So he created this product and I heard this story on Justin Jackson’s ‘Product People” podcast.

So Jason talks about how his very first product was an app. he made with [Willmaker Pro 0:01:50] to help people organize their music collections, and he put it up on a share..site, had a little ‘Read Me’ files that, “Hey, if you like this, send me $20. Here’s my current address.” And one day, he got in the mail, a letter, you know, onward from Germany with $20 and a print-out of that ‘Read Me’ file and he talks about this as being an absolutely pivotal moment for him, where he got someone that he did not know at all, that he had no connection to, to pay him money. So what we have to do is you have to start practicing making money. Jason didn’t start out with any of the big products that we know for now. He actually had a lot of things in-between audio file and what we know him for.

So I went through a very similar process, and I’ll show you some of my first products. I’m not going to go quite the full, embarrassing site and show you all the screenshots. I’ll just show you the names. So here’s a few of…products that made a less than $1000. Actually I get into the WordPress theme business with Widget themes, hosting, iPhone app. I think everybody should make like Flashcards iphone app. at some point. I think that’s a requirement, that we sell on the app. store. and so this was me learning, and it took a long time. I had a couple of more apps., you know, that made in the several thousand dollar range, [inaudible 0:03:31] I still have and then you know, I am just working up, making bigger and bigger apps, and you know, I get into selling other books. So this is like my getting into what I consider successful products and then I have a couple of books that have sold really quite a bit.

But overall I have had really a lot of products. So this is all practice. Later on, you know, as products are starting to make meaningful amounts of money, $20000, $30000, $50000, but it took me quite a while to get to that point. So because I share the numbers and talk about the blogging…I blog about all of that, and public with everything, one thing that I hear all the time is, “Oh, it’s great that, you know, you worked on this book and you were an overnight success because of it.” And what people never see is just all the products that completely failed. And so, if you graph my product revenue over…I actually started working on products in 2007, but zero didn’t look very good on this graph, so actually I had little product revenue in 2008 and so you can see that it took me quite a while to actually make any kind of money at all. So you have to start somewhere. You have to start practicing and you have to build up that skill of making money.

Last…at MicroConf. in Europe this last Fall, I had coffee with some of these guys and this team is, the company is called ‘Source’ and they make a Photoshop plug in called “CSS Hat” I don’t know if any of you would say, “It’s really really good,” if you are a designer or developer and you want to get code, you know, quickly; your Photoshop sells out of our Photoshop and into code and so what these guys did when they are all, you know, just barely out of high school or some of them were still in high school. They did a startup weekend and through that process, they were building…they built CSS Hats, you know, the Photoshop plug in, which, if you think about it, Photoshop plug in is a really small product. You know, they built that in a weekend, they started selling it and they have done really really well.

When they launched it, they made, I think it was $10000 in the first day or so, and it was quite successful, but they started with a small product. They could have tried to jump right into SaaS, they could have tried to jump right into something that would require a lot of support or take a long time to build, but they got something small out there and they started working from that. Here’s a screenshot of a CSS Hat. So there are so many businesses that you can get into, that don’t require a lot of time. May be it’s not the SaaS app. or the perfect business that you want to be building down the road, but you need to know that you have to start small and practice making money, get all those small wins, learn how to get people who you don’t know or who don’t know you, how to get them to pay you money and build from there.

So the next thing and when I figured out this lesson, it was really quite a turning point for me. But if we look back to my very first products, the problem that I had was “How do you get customers to know and care about your products, so what you are selling?” You didn’t know that you exist, let alone convince them that you are someone worth buying from! And so probably those first three years that are represented in that graph, and that was all before I figured this out and I got the answer to this question from a bunch of different sources, all at once and that’s what I primarily set in, but the biggest one is from a General by the name of Chris Coyier and who knows about CSS Tricks? Anybody been to CSS Tricks.com? Quite a few people. So if you want to learn web design, it’s a great place to go. I really enjoyed Chris’s site, but when he started way back in 2006, 2007, I was a web designer at the time. I considered myself decent at CSS and I remember reading the first articles that he put out and kind of thinking, “Oh, that’s cool, but I already know it.” And he would put out more articles and I was kind of like, where he is not that much of an expert, because I already know what he is talking about.

But he keeps writing articles and basically what happens is, we are both learning new things. You know, I’m working a mix of freelance and like full time web design jobs. He is doing the same thing and you keep learning. And as I learned something new, I applied on the next project. As Chris learned something new, he writes about it and applies it on the next project and keeps going, and I didn’t really think anything on this, until Chris launched a kickstarter campaign and what he said is, “I want to redesign my website. So I want to take a little time off from my work and redesign CSS Tricks.com. I think, to live…you know, to survive during that time, I needed about $3500, so if you guys, my dear audience, would be kind enough to, you know, put up that much money in a kickstarter campaign or redesign a site, I’ll create some tutorials along the way and teach about this whole process.”

So Chris goes on to raise $89697, a little above his $3500 goal and I saw this and went like, “What!” Remember, we were both designers, we have been improving at the same rate, we had the same skill level, we were both now advanced CSS coders, I guess. So what was different between what was going on? It clearly wasn’t skill level and what it came back to is that what Chris was teaching, I was just working, I was just implementing what I was doing and I know so many people who are doing really really impressive things now, that you never care about because they either don’t think they are not expert to share or may be they don’t care about that kind of thing. But really all you do and all Chris did was he learned something new, and put it up there and he wasn’t, you know, I guess what you consider an expert in that area, would be someone working on the CSS spec., you know, or working in those meetings and the working group or working for a browser or something like that, and that wasn’t Chris at all! He was just somebody who knew something and started sharing it and that turned into a huge amount of revenue for him.

So Jason Fried has the same idea that he talks about, where he says, ‘Emulate chefs.’ You have only secrets! You know, for chefs, it’s their recipes. That’s what they put together and what they craft and perfect and most people keep those entirely secret. There is probably a bunch of people here who are like, “Ah, I would tell you those numbers, but I don’t know.” You know, they are trying to keep their business secrets to themselves. They don’t want their competitors stealing things. Chefs, on the other hand, the ones you’ve heard of, say, “Take everything. I’m going to…I am not just going to tell you my recipes. I’m going to write them down and you could buy them for a $20,” and that’s their craft. It’s what they have perfected over the years and they are basically giving it away. And they go a step further than that, and say, “Let me bring in cameras. We will get in a studio, and you can look over my shoulder and you could see exactly what I am doing and how I make this.” And so, those chefs aren’t worried that people are going to, you know, take their secret recipes, that are now public and open a restaurant, you know, across the street and put them out of business.

Instead, they know that by putting out all that information, by being public about it, they are going to get more people to come to them. They are going to have more fans; the restaurants are going to be booked out weeks or months in advance, instead of feeling desperate to try to get more people. So a huge realization for me is that people don’t teach because they are experts. They become experts through teaching, so Chris Coyier did not start as an expert. He became an expert over time. He built an audience, and that’s how, you know, he was able to have such a successful kickstart campaign. His audience was just, they rolled with him, the moment he gave them an opportunity to and as far as giving away secrets, like chef do, I think if a handful of companies that…you know, there is lots of companies that teach, but then there is a few companies, like I am thinking of [Buffer], where they will give you, they will tell you everything. You know, “Don’t go much further,” and they will say, “Here is exactly how much all of our team members make.” You know, if you go, view the Google Doc, and you will see like there is 60 other people viewing this Google Doc right now, of exactly, you know, how their customer support person, whatever her name is, how her salary gets calculated based on everything and it’s fascinating that they are willing to give away these levels of secrets.

So there is lots of people in this room, like Reuben from BidSketch, Hiten from KISSMETRICS, who understand that teaching is a fantastic way to draw in an audience, to get people to trust you and then to take it further, you know, like [Buffer], you know, Josh is sharing all of his numbers, being totally public about it and that’s something that his audience, you know, really really loves and that’s going to get a lot of attention and make him really a lot of money over time. So you know, I consider the…I kind of got these lessons from multiple places at the same time. I read Jason saying ‘Emulate Chefs’ and you know, I heard it, you know, that you should be teaching, sharing and I had seen so many examples, but it wasn’t really until I saw Chris and his kick-starter campaign and had all these come together, happen at once, that I realized, “Oh, that’s what’s going on,” and from then on, I became determined to just teach everything I know.

And so you look at people who are teaching and they are, you know, they don’t necessarily have the most revenue, but they are willing to learn new things every day and they are willing to share, and so I would really really encourage you to be much more open and much more public and I think you will see fantastic results from it. So there is a problem that I see a lot in the bootstrapping space and goes back to, there is this guy, you know, [inaudible 0:15:47]. I have known him for quite a while and he has had this idea for a product and he has been working on it for a while. Actually he has been working on it for a long while. It’s a side project, you know. He has got a great software development job; he is paid really well, he is quite comfortable, but he’s been working on this idea for 7 years and you know, being a developer, he was able to write the entire thing himself. He built it out and then he kind of…he’s been improving it, and it’s not quite ready for customers yet. He’s making some progress; he is talking to a few customers, getting there.

That’s taken a couple of years and then he got to the point where, “You know what? That code base is getting a little bit old. I could write some of those things better now.” “You know what? There is this great new library. Let’s rewrite it with that.” So as sad as it is, he’s been working on this one product for 7 years and there is…it’s so easy to have ideas and have things that you are working towards and you totally under-estimate how much work they ought to get done. And so, you just…you know, you would run the risk of becoming that person who always talks about these ideas, talks about the company it’s going to build, the side-project that is going to run and without ever making it happen. So there is a way around them.

But first, I think there is a few people here who have read my blog, so can anyone tell me the name of my first book? Anybody? So it is, the first book that I published is called ‘The App. Designing Handbook’ – that’s about designing iPhone applications. But it’s actually the third book that I started writing. So what were the first two books? And it doesn’t really matter what they were. What matters is that they never got finished. In fact, they never got past an outline and a couple of pages, because I really wanted to write a book and I thought those first two ideas were really good, but what happened is, I would work on it when I was really motivated. So I would get excited, I write out the outline and started writing the book, then I take a break doing something else for a little bit and come back to it, and it will be less exciting, but I would get, you know, another page written. And then my motivation would just kind of die out. And it wasn’t until I learned this much more valuable skill, that I actually made any progress. But it’s from a General by the name of Chris [inaudible 0:18:37] and he said something that really stood out to me.

He said, “I could write a book every year, a 100 plus blog posts, 50 or so guest posts, atleast 2 to 3 business projects” and when he says busines projects, he generally means actually more full-length books, and a few long-form essays and magazine pieces. He is talking like writing for, you know, CNN for their ‘Travel’ section; you know, writing all this stuff and he says, “It is not too hard. I will do all this in a year.” He knew that people would say, “It takes years to write a book Chris.” “I could write a whole bunch in a year.” And the ways that he does it is he just writes a 1000 words a day. So instead of sitting, you know, instead of working for huge amounts of time, and putting, and you know, amazing amounts of effort, he breaks it down and makes slow, consistent progress every day. So I adopted this idea, because I really wanted to finish the “App. Designing Handbook” I was tired of being that person who talked about ideas and talked about the book he is going to write, the products I was going to make and never actually finished it.

And if you guys know someone back from high school or college, who had all those big plans and never executed on any of them, and I did not want to be that person. So I took Chris’s idea and I started writing a 1000 words a day. Well, actually, like any good software person, I first built an app. to help me write a 1000 words a day and then got to actually writing it. This app. is [inaudible 0:20:15] and I wrote that first book; took me a little while to have that going, but wrote a 1000 words a day. After the first book, I finished that and thought, “Great! That was a success.” And the next day my phone pops and says, “We are going to write a 1000 words today.” But now, I finished the book, that was the goal, you know. I shipped something; that was important to me, and then, you know, there is no way I am going to break history…at that time, it was about 75 days in a row, so I kept writing and I wrote another book and I kept writing; wrote another book and I wrote a whole bunch of blog posts and now, I guess I’m stuck!

Like, at this point, I have 600 days in a row, like 620, I think, now and so I guess I am just never going to stop writing a 1000 words a day. But it goes back to that teaching. For me, writing, I can put out all those ideas, I can teach, my reach goes to that person a lot more, but [Joel spolsky] has this idea, where you know, he is applying the same concept software, where he is talking about just making a little bit of progress every day. The idea that your product should be better at the end of the day than it was at the beginning. Even if it was a tiny little bit of a improvement, you have made progress, and so when you are willing to do that, when you are willing to put in that time and that really consistent effort, really impressive things can happen.

So someone else that I really like, name is John Dumas. He has a podcast called “Entrepreneur on Fire” and the remarkable thing that he has done is, he has published a podcast episode every day, 7 days a week, I think, for 550 days in a row and he has seen amazing business growth, because he is willing to put in that consistent effort and put things out so often. For my own app. ConvertKit, things, for a while, really stalled out and got…you know, revenue wasn’t growing, the product wasn’t improving and I found, you know, that decreased my motivation even more. But what I realized is that I was working on it when I was motivated, and so when I started to see things improve again; you know, I started to see revenue increase, I started to see more progress, was when I decided that “You know, I’m just going to make the product a little bit better every day. I’m not going to wait until I have time to sit down and you know, code out entirely new feature or redesign the screen, to make progress. I’m going to add a minimum every day, make something a little bit better, and I’m going to slowly chip away at this.” Because, to be honest, making products is really hard. It’s a skill, like making money, that we get better at over time! But you need to make that consistent progress in order to see the benefit long term.

So the next one is something else that I see a lot, kind of in our world, and that comes from the quest for passive income. When people think, “Okay, I am going to get passive income, I’m going to build this business,” or, you know, “I’m just trying to get the $6000 a month it takes to replace my job,” what they tend to is, and I did this, is that you come up with some interesting niche, and you build a little product and you get it to the point where it’s making $500 or $1000 a month and you go, “Cool! That’s there. Now we are going to go all the way over here and we are going to go to some other interesting little niche, that has a little painful problem that we could solve, and build that up,” and that’s going to get you $2000 a month of revenue. May be you can get bigger, but you now have another idea. “I’m going to go to this other, you know, interesting niche that I can find and I’m going to build up another product,” and the idea is that if this one is making a $1000, this one is making $2000, this one is making, you know, $2000 or $3000 as well, then great! You can replace your day job, you can quit and work on your product business full time. I don’t like that model at all actually!

I think that it prevents you from building something really great, because any work that you put into focusing on this little niche over here, and you are making this product better, is not helping you sell this one over here. They are completely separate silos. So I say now, “I don’t like that model,” but I did…like I did think many people in this room and I ended up with a whole bunch of products that had totally different audiences and didn’t have much overlap. So just as an exercise, I laid them out, kind of as a venn diagram, where you think of each circle for a product represents the audience; the more they overlap, the more overlap there is in that audience. So here is a little graphic…there is some overlap between my two books, because they are both about design. My other book ‘Authority’ is about writing of marketing books and so there is a little bit of overlap there. Then ipad application ‘OneVoice’ which was really for speech language pathologists. Then I had this other SaaS application that was for sign language entreprenuering agencies and any word that I put into, you know, the SaaS application did not help the iphone app, so they all made money, but it was really a pain to make progress on it because they didn’t benefit each other in any way. So I actually killed off everything that wasn’t fairly closely overlapping.

And so I don’t have a single audience now, but I have two that overlap. So I would like to talk about two things; I would like to talk about design and marketing, and so I ran some numbers on my email list. I have a email list of about 17000 people and you know, I tagged everybody, as they came in, based on what interest they had, and so, sometimes when I come out with a product or a blog post, if it’s pretty design-heavy, I’ll just send it to the people who are interested in design or vice-versa, I will just send something that is more marketing purpose. So there is about 10000 or 11000 people on the design side and there is about 8000 people, may be 9000 people on the marketing side and when you notice that those two numbers add up to more than 17000 and so that difference is, there is about an overlap between the two groups, of about 3000 people, who exist in both groups. So the words that I put into promoting a design book does help promote the other products and in the same way I could talk about the sales…you know, the sales results from a launch, teach and share that information and it does benefit my other products, and that’s really helpful.

So what you can think about ideally is having a single audience, where you’ve different products with different price points, all served within that audience, so may be the outside circle is your email list, and the inner circle would be a book, getting further in from that could be a SaaS application that’s for, you know, even fewer people and then you know, in from that could be an expensive training course. Brendan Dunn is a fantastic example of this, you know. His entire audience is targeting freelancers and he has the whole range from the free email course to the $1800 workshop with a SaaS app. in there and everything else.

Someone else I also really like, his name is Sean McCabe and you can kind of see him in the background, but he does this fantastic hand lettering and illustration work and so he’s been creating that for a while and he has effectively three different products or categories of products. Everything on his site is focused on design, but he started out with his store which is a [inaudible 0:29:03], so he would make these great illustrations, and these club of posters and he would sell them in his store and that made some amount of money, and then for the designers in his community or you know, reading his blog, he created a private community where they can pay, you know, I think $15 a month and get some of his time, have a place to gather and all of that. That still targeted the same audience, and then most recently he launched a course called “Learn Lettering” that actually made a $100000 in his first week, which was really impressive, but all of these things are focused on the same audience, so he is able to have a suite of products and he is able to build multiple things.

You know, he is not somebody you might think of stuck working on one thing for a long time. He is able to experiment, try out, you know, because building new products is fun! But Sean keeps it all targeted within that same audience, so that any work he puts into promoting his store is also going to somewhere help benefit his course or his community. Going back to these guys, the woo and the team behind Source in the Photoshop plugins, they didn’t stop with just CSS app., that first plug in, and they didn’t switch to an entirely different market, with their next thing. It said they focused on designers – people who are on design tools and they made more Photoshop plugins and they have gotten into training and other things. Now they have a suite of products they can cross-sell. They are running an impressive business now and they are doing it all by focusing on one audience. So the habits that have helped me to build a product empire are first to start small, practice making money, make consistent progress each day, serve a single audience, and to teach everything you know. So that’s it for my talk.

Thank you guys.

[Applause]

Male Speaker: So do you build a landing page first to check the demand for the book that you’re about to write and then make a decision or you just write away anyways?

Nathan: So I see two different ways to validate a product. They both have advantages. The easy way, and they are both great ways to go. The easy way is to put up a landing page, drive as much traffic to it as possible and ask for an email address and then you can make assumptions based on quality of traffic and that kind of thing, and you could make, “Yes, okay, may be one out of every twenty people who puts an email address is going to purchase. Okay, there is interest, that’s great!” And that’s what I typically do for a book. Now something bigger like when I went to make ConvertKit, which is a SaaS application, if that goes wrong, there is a lot more money and time on the line than there is for a book, and so in that case, I do pre-orders and I think that’s ultimate validation, where you ask people, “Will you pay for this?” And if you can get people to pay for a product before it exists, where you’re like pitching them one-on-one, you really got to work on finding a market, a diferent market or we could set up a line of product entirely. So I would say yeah, a landing page for every product, collecting email addresses and do that no matter what, and that’s one way to validate. The other way is ask people to pay you money.

Male Speaker: I am just wondering in terms of being open – you just start being open, once you are targeting more the entreprenuerial community, and founded the value of that or was that something that you would advise in other industries?

Nathan: It definitely works in other industries, but this is something I struggled with for a while and Jason Fried and I were actually talking about this at one point and I have a video somewhere over, where he is like, he would tell you he is frustrated, in the conversation, because… I’m just not getting it, because I keep thinking, like cut along the lines of your question, like, well, that works…basically they are the same hemis. [US] could talk about “How you build BaseCamp” and all that because you are targeting web designers and if you kind of …that we are not just targeting web designers, we are targeting, you know, all small businesses and they use referencing, you know, the articles that he writes for Inc. magazine and all these…and so he came out with a bunch of examples as to how they are teaching and sharing his drawings into big audience, but it’s definitely true where you can have an audience that you have nothing to teach them and I ran into that problem with my iPad app. that was for speech language pathologists.

I have nothing to teach speech language pathologists and so if teaching is a marketing method that you want to try and I think you really should, then you should definitely consider going after a market that you are a member of. And this is just fantastic for a long term caring about your audience and all that, but you know, I am a designer and I sell a lot of my product to designers. I am an entreprenuer; I sell my products to entrepreneurs. And there is, you know, there is a lot of range in that, but if you list out, you know, all your own characteristics and that could range from everything to the ones I mentioned, you know, like I also add things in. I am a father, a husband, a snowboarder…you know, there’s a lot of attributes that you have, where you could choose any one of those and target an audience that you are a member of and if you do that, it’s way easier to teach.

Male Speaker: Thanks. If you haven’t made your first dollar yet, do you think it’s better to focus more on validation of a “good idea” or if you can just get something out within a couple of days that might be $20? Which approach is better to do? Write about the validation, that kind of stuff and start small, stay small or just, you know, get something out there and try to get someone to buy it for a dollar or whatever?

Nathan: Well, if you are taking the advice from anybody, like all the people who pitched me their product ideas, back when I did web design, “You should build like a big marketplace first,” I think it’s good to start small, but you don’t want to work on something that you don’t care about or have any interest in, so if it’s a problem that you want to solve and you can get it out quickly, I think that’s good. You know, I talked about all the early products that I had, that didn’t make it anywhere. You could put a big practice lable over all of those – that was me practicing making money. I cared about all of them, I thought all of them could be the thing that carried me for a long time, and they just eventually fizzled out. It’s hard to know, but I would balance it based on how long it’s going to take you to make that first dollar. If your big idea is going to take you a year before you think you’ll make any money off on that and you are not experienced, I would say, “Wait for a minute. You could do something like an iphone app., a WordPress theme or Photoshop plugin, something where there is an existing ecosystem that you can sell into; you know, you can sell on a marketplace, and it’s much easier for you.”

Male Speaker: So with regards to breaking the streak…like what do you do if you get really sick or your wife is giving birth or something like that or do you just break the streak and start over?

Nathan: So I have been a little bit flexible with it, where writing a 1000 words for every day, so sometimes things that happen, where I miss a day, so I just write 2000 words the next day and if I go on vacation, usually what happens is, I will do a little bit, go on vacation because I like it, but you know, I will build up in advance and sort of like quite a bit ahead and then you know, usually I’ll be may be a day or two behind by the time I get home, and then I’ll catch up. The great thing about making rules like this, is that it’s your thing, so you can do however you want to make the rules as flexible as you want. The important thing is that you just keep making progress.

Male Speaker: I have been with writing for the last couple of months and I found that I do a lot of editing for the stuff I write, so do you write the 1000 words and then you spend a couple of hours editing? How does your edit cycle work?

Nathan: For me, if I do a lot of editing, that can count as my writing for the day, like really a lot of editing, because editing is a painful process and so, you know, if it’s you, then your habit, you can make the rules, so you know, whatever works for you, if you want editing to count, I did a video course for Photoshop design, so I, you know, did a whole ton of recording videos and that counted, so I get to make the rules.

Male Speaker: Thanks again Nathan.

Nathan: Thank you.

[Applause]

 

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