ConvertKit’s Average Revenue Per User (ARPU) is $64;
They have 36,634 active customers;
Their new subscriptions are down 8% Year on Year;
Their Monthly Recurring Revenue is up 0.8% YoY.
There is a Livestream of up to 22 parameters that anybody in the world can track, including their competitors.
But for Nathan, sharing these numbers openly is about leaving a trail of breadcrumbs for later entrepreneurs to follow.
Any new bootstrapper would love to check out this information, especially the fact that 4 months in, ConvertKit was doing $2500 MRR.
But 15 months into ConvertKit’s journey, revenue actually declined to $1300 MRR.
At the time, Nathan was finding it hard to grow ConvertKit.
A friend even advised him to shut the company down. (read the full story of the first 2 years of ConvertKit’s journey in this older IndieHackers interview)
Nathan’s ability to push through those points and emerge to a point today where the company is doing over $2M MRR is inspirational for all Indie Hackers.
It gives them hope and strength during tough times.
Nathan builds in public as a mission to help other founders.
This is how he describes it –
” For us, our mission at ConvertKit is to help creators earn a living. Partially that’s in building the software that we build, the training, education, everything else. But I think of it as being able to leave, our public metrics are leaving breadcrumbs for every other founder who will follow us.”
For new founders, data is easily available for very early-stage companies who are building in public.
When Nathan was wondering where ConvertKit fit in this model, he tweeted about it and got interesting answers.
Funnily enough, Chipotle fits all 4 value propositions.
But what value props does ConvertKit have?
Nathan is quick to admit that ConvertKit cannot be a “Must Have” product purely because of the industry it operates in.
There are plenty of email marketing companies in the industry, many of them much cheaper than ConvertKit.
Nathan wants to hit the “Best Quality” and “Aspirational” value proposition, and definitely not the “best bang for buck” value prop.
ConvertKit’s paid plans start at $29 a month, which is expensive compared to Mailchimp that starts at $10 a month and also has a more generous free plan.
But Nathan believes that when you’re going for the best quality, you shouldn’t worry about being a little expensive.
Positioning ConvertKit in a crowded market
ConvertKit positions itself as “your favorite creator’s favorite marketing tool”.
That’s the aspirational part of the value proposition.
They recently acquired FanBridge, a Fan Relationship Management (FRM) platform, to gain market share in the “email marketing for musicians” industry.
They moved from the 4th spot to the 3rd spot in that space after this acquisition. With only Mailchimp and SalesForce ahead of them now.
They feel people’s favorite creators are musicians, and if many popular musicians use ConvertKit to send emails to their fans then that strengthens their position as being the “favorite marketing tool of your favorite creator.”
Another interesting way Nathan positions ConvertKit is that they want to become the guide instead of the hero.
They want to be Yoda instead of Luke Skywalker.
A lot of companies miss out by positioning themselves as the hero, while in fact, they will benefit more if they made their customer the hero.
Substack is an email solution that falls for this.
Almost all Substack publications look and feel the same.
There are so few customization options that you feel like Substack is the hero of the story, and the writer is just a sidekick.
Being a guide can be a useful north star for SaaS companies.
2 good questions all Indie Hackers should ask themselves-
What Value Proposition does your company provide? Where does it fit in the 4 Value Props model?
Are you the Guide or the Hero in your customer’s journey?
Advice to Indie Hackers 🤗
Nathan’s advice to Indie Hackers is not to give up too early, have the patience to enjoy the fruits of compounding –
“I think the biggest thing is that it takes a long time. When you look at compound growth of any kind, you have to give it enough years for it to compound.”
“The thing that most founders end up doing is that they ended up selling early, moving onto the next project, giving up too soon”
“it takes way longer than you think, and it’s worth it if you keep going.”