← Young and Profiting with Hala Taha
Young and Profiting with Hala Taha
Nathan Barry: The Ladders of Wealth, How to Build a $40M Creator Business from Scratch | Entrepreneurship | E363
01:18:13
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- [00:00]
Hala Taha
Today's episode is sponsored in part by OpenPhone, Shopify, Mercury, Indeed and Framer. OpenPhone is the number one business phone system. Build stronger customer relationships and respond faster with shared numbers, AI and automations. Get 20% off your first six months when you go to openphone.com Profiting Shopify is the global commerce platform that helps you grow your business. Sign up for a $1 per month trial period at shopify.com Profiting Mercury streamlines your banking and finances in one place so you can focus on growing your online business. Learn more@mercury.com Profiting Attract, interview and hire all in one place with Indeed. Get a $75 sponsored job credit at Indeed.com Profiting terms and conditions apply. Framer is the designed first, no code website builder that lets anyone ship a production ready site in just minutes. Launch your site for free@framer.com and use code profiting to get your first month of of pro on the house. As always, you can find all of our incredible deals in the show notes or@youngandprofiting.com deals.
- [01:05]
Nathan Barry
Everyone was telling me like social media and all of this is gonna drive the sales, but it's really email to drive the sales. I made $12,000 in the first 24 hours.
- [01:14]
Hala Taha
Wow. Nathan Barry, one of the most respected voices in the creator economy and the brains behind Kit, the software company that's powering over 50,000 creators, including names like Tim Ferriss and James Clear. What you think the good and the bad of AI?
- [01:29]
Nathan Barry
One thing that I'm worried about is AI taking out the bottom rung of every career ladder. But I worry that if AI eliminates the bottom rungs of all of these.
- [01:37]
Hala Taha
Jobs, then you talk about the creator Flywheel, how that's different from traditional marketing funnels.
- [01:43]
Nathan Barry
Every step moves super smoothly into the next. It gets easier with each rotation. We can optimize our conversion rates, make our landing page better. Calls to action, all of that.
- [01:51]
Hala Taha
Somebody on YouTube or Creator on social media, how can they leverage this flash wheel concept?
- [01:56]
Nathan Barry
YouTube is a very algorithm driven platform, so if you have 10,000 subscribers, that is not a guarantee that you get 10,000 views. We could complain about the new social media algorithms or you could Instead Spotify.
- [02:09]
Hala Taha
Offered you $200 million and you turned it down. Why? Yap gang, this episode is a must. Listen, if you're building anything online today, we're sitting down with Nathan Barry, one of the most respected voices in the creator economy and the brains behind Kit, the software that's powering over 50,000 creators including names Like Tim Ferriss and James Clear, Nathan went from being a shy, homeschooled kid who loved making things to building a $40 million a year company. And and he did it all without venture capital. No shortcuts, just grit, purpose, and brilliant frameworks that we'll unpack. In this episode, we're talking about the exact strategies Nathan used to grow from self publishing, his first book, to turning down a 200 million offer from Spotify. Because what he's building isn't just a company, it's a mission rooted in creator ownership and long term value. In this episode, you'll learn about his creator Flywheel and why it blows traditional marketing funnels out of water. The we'll also break down his ladders of wealth creation and explore why teaching everything you know can become your greatest growth lever. If you've ever wondered how to turn your audience into a business or your passion into profit, this is your blueprint. So grab your coffee, your journal, whatever you need. Because this episode is stacked with practical gems that could totally shift your approach with your creator journey. And if this is your first time listening to the show, go ahead and hit that follow or subscribe button. We drop gems like this every single week and trust me, you don't want to miss what's coming next. Nathan, welcome to Young and Profiting Podcast.
- [03:56]
Nathan Barry
Thanks for having me on.
- [03:57]
Hala Taha
I'm really excited for this conversation. I love to talk about creator entrepreneurship. So when I was researching your background, I found out that you were a really shy kid and you always love to build and sell things. So talk to me about what point did you feel like, okay, I want to be an entrepreneur when I grow up.
- [04:16]
Nathan Barry
I like to make money. And if you want to make money, you probably either need to be an entrepreneur or maybe pursue a career in sales, which I guess is pretty entrepreneurial in itself. So maybe when I was 12 or 13, around that time I noticed that we really didn't have much money as a family. So I noticed a lot of conflict that came from that and just struggles. And so I thought like, okay, I gotta figure out how I can make money so that I'll never have those same struggles in my life. And so I had a bunch of different ventures. One of the first ones was a pet sitting business where we'd get paid $10 a day to go to someone's house and let their pets out and water their plants and all that. $10 each time we went over. So sometimes it was $20 a day, which was fantastic money. I got into woodworking, my Family always made things. My dad built the house we grew up in. We had a little wood shop. And so I'd make these wood carvings and sell them door to door or at craft fairs. And that made even better money. And things didn't really take off till I got into web design a few years later. But those were some of the early ventures.
- [05:25]
Hala Taha
Yeah. I loved learning about your background story because it was really unique, and I didn't really expect a lot of the things that I learned. So I learned that you were homeschooled, and I also learned that you got into college early, and then you dropped out at 17 years old. Just those in itself is really unique. So talk to us about your experience getting homeschooled. And then what made you realize I don't even want to do structured school at all?
- [05:49]
Nathan Barry
Well, there were two pivotal moments for me in homeschooling. So first, I have three older siblings. My mom homeschooled all of us, and she'd really figured out the system and the curriculum and all of that with my older siblings. And one of the best things about homeschooling, maybe two great things about it. One is it's really tailored to you as an individual, so you're not waiting for an entire class, or a class is not waiting for you. If a subject takes you longer to figure out, that's fine. You have time. Or if you get something in 20 minutes, it's not like the class spends the next hour working on it while there's someone else that we're waiting on. That was one thing that was fantastic, and then the other is that it really teaches you early on that you're in charge. And my parents drilled this in. This is your responsibility. We're here to help you. But whether you get it done or not is on you, and the consequences follow or the benefits follow as well. That's a lot like real life and especially a lot like business. So one key moment was when I was probably 11 or 12, we grew up in the mountains outside of Boise. And there was a time that in the winter, that we just had the most perfect snow coming down. And it was the kind of thing where you don't want to be sitting inside doing school. You want to be outside flooding. And I'm just, like, sitting here, and I'm just. I can't focus at all. I'm just staring outside, watching the snow accumulate. And my mom says, you know, you don't have to do school for, like, four or five hours. You only have to do school until it's done, then you can go play outside. If that takes you 90 minutes, amazing. If that takes you four hours, like, all right, well, that's on you. And so all the usual complaining and lack of focus and everything else that I would do was immediately gone because, like, all right, let's power through. Let's get math, let's get literature. Like, let's knock all this out. And this is like the most focused 11 year old you've ever seen. And 90 minutes later, I'm outside sledding, School's done. And it took me a while to internalize that lesson, but I realized basically, there's no speed limit at all. You get to set the pace. Because I'm like, wait a second, why have I been wasting all this time having school take four hours or five hours a day when I could just actually sit down and focus and knock this out? And that's on me. So that was one thing. And then a few years later, I realized that all of my friends were older than me. My older siblings were great at letting me hang out with them, and their friends were my friends, and they were super inclusive. And that was great until I realized, oh, you all are gonna go to college. And this age gap that didn't matter before is gonna be really obvious when I still have two and a half years of school left and we're all gone. And so I went back to my mom and I said, so is high school? Cause I'm just now starting to enter high school. Or think about it, is high school a set amount of work or four years? And she's like, look, same philosophy. I've outlined all the curriculum for your older siblings. If you get that done in three years, you can graduate three years or even sooner if you want. And I remember thinking that I was really bored when I did math, and I was also really bored when we go on these family road trips, like an eight hour drive to Seattle. And so I was like, why don't I just combine these two? And so I basically just did a speed run through as many school subjects and curriculum as I could. And on, like, these family road trips, I would do, like a month's worth of math homework. And so the end result is I ended up graduating high school when I was 15, a little before I turned 16, and then going to college and only being slightly behind my much older friends. And it just really drilled in this idea of, like, there is no speed limit. You set the pace.
- [09:32]
Hala Taha
So then you got to college for first real school experience. Is that right?
- [09:37]
Nathan Barry
Yeah. My mom made us take all the standardized tests for, like, middle school and high school. We'd ask like, okay, what's a good grade? As we did this. And it was always in percentiles, so it wasn't a score. It was like how you scored relative to all the other students. And she would say, as long as you get in the 95th percentile, we're good. And I. So I remember thinking like, okay, you have to be in the 95th percentile. And we'd get 98th in one thing and 99th and another, all that. I'm like, sweet, we're good. It was until I later I realized what that actually means. And that means that, you know, that you've scored higher than 95% or 98% of all the kids who took that. It's just, that's the way that my mom anchored it. Had I fully understood it, I would have been like, mom, that's an insanely high bar.
- [10:15]
Hala Taha
Which is like, what?
- [10:17]
Nathan Barry
Basically everyone always had this idea of like, oh, you're getting an inferior education was a common thing. And so she counteracted that by saying, you're going to learn so well that.
- [10:27]
Hala Taha
You'Re better than everybody else.
- [10:28]
Nathan Barry
Yeah, so that was our check in to standardized school. But, yeah, college was the first time in an outside classroom and all that. I also showed up when I was.
- [10:38]
Hala Taha
15, so that must have been.
- [10:41]
Nathan Barry
One funny thing is a friend of mine who had also been homeschooled, and she was a couple years older, she had started college when she was 16. And she gave me some advice on to never answer the question of how old you are because everyone will immediately treat you differently, but to not lie about it. And so her method, which I adopted, is when someone come up because you'd be sitting in math class and they'd be like, how old are you? You know, and instead of saying, oh, I'm 15, I would say guess. And they'd look at me and be like, okay, well, he looks 15, but he's in a college freshman class, which would make him 18, so 17. And I would just say, oh, good guess. Because, like, it was a good guess. It was wrong, but it was a good guess. And be like, yeah, this kid's 17 and he's in class. I just never corrected it.
- [11:32]
Hala Taha
I love that.
- [11:33]
Nathan Barry
But that meant that people would at least somewhat accept and include me. And then I learned a lot in college, like all of the, you know, navigating classes and living on my own. I ended up living in a house just off campus. With my older siblings, and that was a good experience. And I just kept learning and trying to figure out more ways to make money.
- [11:54]
Hala Taha
Yeah, which led you to dropping out of school and starting web design. Right? You started doing stuff on the Internet to make money. So talk to us about your evolution of trying to make money on the Internet. What really stuck first and then how you really got into email marketing. Precursor to ConvertKit.
- [12:14]
Nathan Barry
So I was born in 1990, so I was 14, and my very first high school girlfriend introduced me to web design. And nothing came of that relationship except for my entire career. She was the one who showed me, like, hey, you can build a website and put it on GeoCities. You can write HTML and all of this stuff. So I became obsessed. And I remember I built a website for the Idaho Chess Association. My younger brothers played chess. And I got paid $75 to design a logo and $300 to design that website. And that was like, my first freelance income, maybe when I was 15 or so. And then as I was going to college, I kept taking on more design projects and learning how to build websites more and doing all of that. And then when I was 17, I'd spent two years in college at this point, and. And I landed my first $10,000 web design project. And I called up my mom and I said, look, I'm here to learn how to make money. I'm pretty sure I'm making money now. And so she was like, yeah, if you want to drop out, go for it. And so I ended up dropping out and doing freelance web design for a couple more years. Now, in 2009, I said I'd been freelancing for almost two full years at that point. I guess the end of 2008, I had my best month ever. I landed a bunch of clients that was going really well. And then I went away on a trip to South Africa with my girlfriend at the time, now wife, and a bunch of friends. We worked at this orphanage in South Africa and did these amazing trips. And I took five weeks off, which I felt really good about because my freelance business was going so well. And when I came back, all the clients that I had lined up to work with, they all were like, we're not spending money. Because it was then the financial crisis had fully hit. And so I went from feeling awesome about my freelance business to be like, this isn't going well at all. And so the quick version of all of it is I ended up taking a job at the one client that was still spending money, which is a company called Unity Media Group. And I ended up leading the design team for them. They were like 15 people when I joined and they raised a bunch of venture capital, like scaled up the team and I spent three years there, learned really a ton, the basics of leading a team, all of that. That was actually the last real job that I've had. The only three jobs I've had in my life are working at Wendy's. In high school, I worked for the Boise State University bookstore very briefly. And then I worked for this company, Unity on their software design team.
- [14:49]
Hala Taha
Wow, you're true entrepreneur.
- [14:52]
Nathan Barry
Yeah. And then I, you know, I've been running kit for the last 12 years. So unemployable is probably the, the technical term that.
- [14:59]
Hala Taha
Yeah, or super ambitious and wanting to create your own offers and things like that. We have a lot in common. I actually started doing freelance web design in college and did that as a freelancer while I was working at a radio station. You also got into blogging, right? So talk to us about like at what point you started blogging and then how you discovered email marketing.
- [15:21]
Nathan Barry
Yeah. So in the web design world people would always say like, oh, you're self taught. And I was like, that's kind of true. But really all of my teachers for learning web design were all of these bloggers who were writing about, here's how to do this thing in css, here's these Photoshop techniques and all that. I felt like self taught was always kind of a weird thing. Like no, I had teachers, I didn't know them, you know, but this amazing community on the Internet where my teachers, I was just self motivated to go through and learn the material myself and all of that. So probably from 2007 onwards, I was following a lot of blogs. First web design and then kind of into business and on from there. And then a couple things happened. First, the company I worked for in 2010, the iPad came out and they said, hey, we want to have an app in the app store the day the iPad is released and we want you to design it. And I had no idea what I was doing. And so myself, and then a couple developers in the company had sort of this trial by fire of learning how to design and build iPad apps. And we pulled it off, we had the app released, got to see it on day one and do all this. And that sent me down this path of learning how to design for the iPhone and iPad specifically. And then probably for the next two or three years, that was all I did. I did other things too, but that's All I wanted to do because it was just so much fun designing for a physical device. And the form factors were so different from the basics of web design. And so that continued until I started building my own apps, and I would code them myself and get help from my developer friends, and I'd do the design. And I got to the point where a few of my apps were making a couple thousand dollars a month. And with that, I decided to quit my job, go back to freelance. And, you know, I sort of had this baseline of product income. And then you started doing more freelancing all the time, paying attention to this world of blogging and the very early creators who were making money online. And we dive into all of that because it's a fun process.
- [17:22]
Hala Taha
Yeah, I'd love to. Just really quick, in terms of your experience, I think you used mailchimp to start with, and then this is so helpful to know that you were building apps, because for me, I was like, man, I couldn't imagine launching, like, a platform that seems like such a difficult thing to do to, like, build a whole entire platform that's going to compete with these giants like mailchimp. And I don't know if constant contact was out back then, but there was a lot of email service providers out there that are giants. So it's helpful to know that you had all this experience with app design, and you merged what you knew in that space with the problem that you were trying to solve with email. So what problem were you trying to solve? Why did you decide to create this platform?
- [18:05]
Nathan Barry
After I left Unity and started working on freelance design, I was really inspired by people like Chris Gillebeau, Tim Ferriss, and others like that who were talking about, here's how you make money on the Internet, and Chris Gillebeau would make a guide on a very particular subject and then sell that. I was like, okay, let me write a book about how to design iPhone apps. I had two thoughts with it. One, if I'm the guy who wrote the book on iPhone app design, then I'll get way more clients wanting to hire me to design their app. The credibility will increase. And the second one was, well, if these guys are making money, I probably can too. So I sat down, wrote a book. It was called the app design handbook. And as an aside, I struggled to build a habit to write consistently. And so I was like, I'm going to make an iPhone app to help me track this. And I made this app called Commit, which isn't around anymore, but there's other apps like it you just say, hey, I'm going to do this habit every day, and it just reminds you and then keeps track of the streak. And so I said, I'm going to write a thousand words a day. And I was at 80 days in a row when I published the book. And the next day the iPhone app popped up and said, are you going to write a thousand words today? And I was like, no. I finished writing the book and so I ended up writing a summary of how the launch went and all that, published it on my blog. And then of course, the app popped up the next day, as it's going to do, and said, are you going to write a thousand words today? And I was like, no. And so I ended up writing another book. So we get into all the numbers, but it was wild. I just launched down this path of consistent writing for a long time. But my goal from the book was I thought, okay, if I can get new clients and if I can make $10,000 over the lifetime of the book, that would be amazing. And so I launched it to an email list of 798 people on Mailchimp. Everyone was telling me like, social media and all of this is gonna drive the sales, but it was really email that drove the sales. So I made $12,000 in the first 24 hours.
- [20:01]
Hala Taha
Wow.
- [20:02]
Nathan Barry
And I was blown away. And I never took on another freelance design client. I thought, this is a dream, you know, making product again. But then the other thing was that email was driving all of these sales. After that book, two things happened. One, I became obsessed with email, and I was trying to learn everything I could about best practices. And then the second thing is I just kept writing because I didn't want to break the chain in this little iPhone app I made. And so I ended up writing a thousand words a day for another 90 days straight. And at the end of that, I published another book called Designing Web Applications. Similar model, but applied to a different medium, and that launched to a bigger email list of like 3,000 people. And it made $26,000 in the first day, $50,000 in the first month. And my last job that I quit a year earlier, I made $63,000 a year. You know, I'm now making almost in a month what I made in a year.
- [21:00]
Hala Taha
Yeah, I know that feeling.
- [21:01]
Nathan Barry
Creator World is amazing.
- [21:04]
Hala Taha
So basically you became a creator once you started writing this books, that's when you officially became a creator and you never looked back in terms of being a creator. Is that right?
- [21:13]
Nathan Barry
Yeah, that's absolutely right. I mean, that next year I made $250,000 as a creator. And I'm like, this is a dream come true. But in that, you know, I'm obsessed with email. Email is the secret to high earnings. As a creator, I'd see these influencers who had, you know, tens of thousands of followers on Instagram or something else, and they weren't making nearly the money that I was making. And so I realized, like, oh, it's in the email list.
- [21:41]
Hala Taha
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- [24:45]
Nathan Barry
So.
- [24:45]
Hala Taha
So if you're like me, you probably started your business off using your personal phone. When I started yap, I used my personal sal for all of my business calls. I would take calls with clients all the time, texts with clients all the time, and people would refer clients to me on my phone all the time. And while my business grew, this became totally unmanageable. And that's where OpenPhone comes in. OpenPhone is the number one business phone system built for modern entrepreneurs. Forget old school landlines juggling two phones or voicemail because openphone seamlessly works as an app on your existing phone or computer. And instead of things like voicemail, you have chatbots and things that can help move your business forward in a modern way. Their collaboration features are a dream for your team. You guys can share one number and work together on calls just like a shared email inbox. How cool is that? That way you can reply faster to customers, people can toggle between customers effortlessly. Plus you get one unified voice for your company across multiple team members. And of course, no miss leads. OpenPhone's AI agent can be set up in minutes to handle all of your after hours calls, answer questions and capture new business so you never miss a thing. Whether you're solo or scaling fast, openphone is a total no brainer for your company discover why over 60,000 businesses trust OpenPhone. OpenPhone is now offering my listeners 20% off your first six months at openphone.com profiting. That's O P E N P-O-N-E.com profiting. And if you have existing numbers with another service, OpenPhone will port them over at no extra charge. OpenPhone. No missed calls, no missed customers. If you were just starting out, where did you build the email list to start with when you had your books?
- [26:25]
Nathan Barry
Yeah, so I built it from a lot of other blogs. I wrote lots of guest posts on other blogs, different design and iPhone app development communities. You gotta realize at the time, Twitter was going strong, but Instagram was only 2 years old at this time, maybe 3 years old. And so Instagram was not the powerhouse that it is now. I remember today I would go all in on either Instagram or LinkedIn or both. But yeah, so the emails were coming from the blog and other communities. SEO was starting to be a thing. And then I just said, all right, let me learn everything I can about email. And I would implement every best practice I could of, like, let me give away a sample chapter and then there's a automated sequence that gets you to buy the book afterwards because I were segmenting the list and I just had to hack around mailchimp for all of us. Then I said, you know what? I'm going to start a email company just for content creators like me. It was called ConvertKit, and I'm gonna gonna build this up. So that became the next 12 years of my life. And then last year, we rebranded from ConvertKit to Kit.
- [27:34]
Hala Taha
We're actually transitioning to Kit at Yap Media. So that's well underway, which I'm really actually from Mailchimp to ConvertKit. Luckily, Mailchimp is not my sponsor. That's absolutely incredible. So you became a creator before the term creator economy was really created? Creator economy was there. But creator entrepreneurship, that's a new thing. I feel like in the last year or two, it's really started to bubble up where, like, everybody wants to be a creator entrepreneur. And like, almost all entrepreneurs are becoming creator entrepreneurs.
- [28:06]
Nathan Barry
Well, if you think about it, entrepreneurs are great at identifying points of leverage and then maximizing that. And so usually there's something where you figure out, oh, here's a distribution method or here's a way that we can manufacture a product or something like that. Something that gives you leverage. And so something that you and I have known for a long time is that building an audience is insane leverage. Probably the best leverage you ever get, because not only do you get distribution that you normally have to pay tens or hundreds of thousands of dollars for, but you get trust at the same time. And you get people saying, oh, I trust Hala, I trust Nathan. What's their take on this thing? And that makes a huge difference. And actually, I guess the third thing you get is relationships. You end up meeting all of these people who also have leverage through their audience, that trust and everything else. And so the compounding effects are insane. And so entrepreneurs used to say, oh, that creator influencer thing that you're doing, that's interesting, but I'm running a real business. And now they come over and they say, actually, I'm sorry, you will have the best distribution that exists in the world. I got tired of paying for attention with meta and Google Ads, and now I want to get the attention for free. Teach me your ways. Because they're realizing I can build a massive business on the back of an audience, and that's what's going to dominate how attention and how businesses are built over the next decade.
- [29:35]
Hala Taha
Yeah, you talk about the creator of Flywheel. I'd love for you to break down your philosophy around the creator Flywheel and how that's different from traditional marketing funnels.
- [29:44]
Nathan Barry
Yeah. Oh, man, there's so much. I could talk about Flywheels forever. Maybe first in Flywheels, I think it's one of those words that a lot of people use that people don't actually know what it means. So I mentioned a trip to South Africa in 2008, and this is where I first came across a real life fly, Flywheel. And so we were installing this well at this orphanage in Misera, which is the capital city of Lesotho, and electricity was inconsistent. They would have these rolling blackouts. And so we're like, oh, we can't put a pump on this. It's going to require electricity, because otherwise the 200 kids at this orphanage are not going to have water whenever the power's out. And so then you're like, all right, we need a. A hand pump. And if you've ever been camping or something like that, you know, you imagine like a long metal handle, and it's a lot of work to pump water up hundreds of feet. So that's not gonna work. What exists out there that can take energy that you put in and compound that not require electricity and all this water, and that's a flywheel. So it's this big metal wheel that sits on top of the pump, and instead of this linear up and down energy of a hand pump, you get this rotational force where all the momentum that you put in doesn't reset, it carries forward. And so we put this flywheel on there, and at first when we started pumping it, it was really hard, way harder than a hand pump would be. And that's actually true of a flywheel all across the board. It's much slower and much harder to get a flywheel going. But once it builds momentum, that carries forward. And so instead of the same effort getting the same impact on a flywheel, a huge amount of effort gets very little impact. But then gradually the effort decreases and the impact increases until the spy wheel on the well, at some point, I'm spinning it with one finger. I first had to lean in really hard to start. I'm now spinning with one finger and getting even more results than I was when I started. And so this works in real life physics, and it also works in business and audience building and everything else. Let me give you a really simple example. If you write a weekly newsletter or any kind of content that you produce on a weekly basis, but using a newsletter as an example, a lot of people struggle with what to say. And so say, if newsletter goes out Tuesday at 10:00am, probably Monday night at 9:00pm, you're like, oh, shoot, what am I going to send tomorrow? And so the old scattered process is where you'd be like, you're like brainstorming ideas, you're coming up with it, and you, through force of will, you get something out, but you can actually design a flywheel around that problem. And so instead you could say, all right, when someone signs up for my newsletter, I'm going to send them a couple welcome emails with my best content. And then maybe email three, I'm going to send this really personal email and just say, hey, Nathan, it's Hala. Thanks so much for subscribing and checking out the content. Just one quick question. What's your biggest struggle related to building your online business or your journey as an entrepreneur? Or if we go back to me back in the day, hey, what's your biggest struggle with learning how to design iPhone apps? Hit reply and let me know. And this is plain text. Looks like it was written in Gmail and I just fired it off. It's maybe two sentences. People reply to that. I organize all of those replies into a label in Gmail. And now when I'm going, oh, what am I going to write about? I go into those replies and I say, oh, now I have people telling me their exact pain points and Frustrations. So instead of brainstorming a hypothetical, I'm actually looking at exact pain points that people have. I write an answer to that one person and then make it a little more generic. And I know that I have this highly useful newsletter that's going to go out. So then if we put it in flywheel form, the more subscribers I get, the more responses come through, the more frustrations I have to pull from to solve with my newsletter. My newsletter goes out, which then helps me get more subscribers, which gets me more responses, which gives me more frustrations, and around we go. And so it takes something that was like the hand pump version, it was difficult and painful and turns it into something that's quite effortless and get to the point that it becomes really, really easy to do. So last thing on the flywheels there is, there's three laws to a flywheel. The first is that every step flows smoothly into the next step. So instead of like a linear process where you do something and then stop the flywheel, everything flows all the way around until the last step goes smoothly into the first step. The more newsletters we send, the more subscribers we get. That's our loop closer. Second is that every step is easier with each rotation. So it gets just a little bit easier the more we do it. And that might be you're automating certain things, you're getting more consistent with it. And then the last one is that each rotation produces more than the previous rotation. And so that's where each time this goes around, we're getting more ideas and more subscribers. And it's just wild. I implement flywheels everywhere in my business and it means that I can run my entire personal brand in a few hours a month instead of before where that was my full time career.
- [34:54]
Hala Taha
I love this concept. I feel like I need to think about all my funnels and think about it in a flywheel. I can think of one example in my business, I've done these sponsored webinars for like all these different brands for like three years now. And so in the beginning it was really hard when we first started because I didn't really have an email list. But these webinars have a zoom and when people register, they give me their email. So now we've got a list of 30,000 people that love to come to my webinars. And every time we do them, we get another 2,000 emails that get added to the list. And it gets easier and easier to just get a sold out webinar or whatever it is because it Just is a flywheel effect. So that's one example that I have in my business. What about somebody on YouTube or like a creator on social media? How can they leverage this flywheel concept?
- [35:43]
Nathan Barry
Yeah, well, let's take YouTube as an example. We always pursue YouTube subscribers. That's the metric. But YouTube is a very algorithm driven platform. So if you have 10,000 subscribers, that is not a guarantee that you get 10,000 views. More like a guarantee that you get maybe a thousand views. And then if the video is decent, then maybe you get 3,000 views and only if it's great does it reach all of your subscribers. Go on from there. So what a lot of YouTubers do is they build newsletters and email lists combined with their YouTube channel. And so the way it works is you put out a video and say, hey, I'm teaching this topic end to end, right? Maybe I'm teaching product launch strategies in my YouTube video. Well, at the end of it I might say, hey, if you enjoyed this and you want to deep dive on it, I have a free 5 day email course that gives you a lot more in depth on product launch strategies. And so now I'm converting my engaged viewers through to the email list and then I'm going to send a regular newsletter, say every week, staying in touch with those people. Well, now when I put out my next YouTube video, instead of hoping that YouTube promotes it to all of my subscribers, I actually have this email list and I have the ability to push content to them. And so I'm going to publish my next video. But now I'm going to email the thousand people that signed up and say, hey, go check out this video. They're going to go there and watch it. YouTube's going to be like, oh, this is a good video. And they're going to see the watch time and the retention because your biggest fans showed up, they're going to discount it a little bit because they know that you sent those people rather than YouTube sending it. But then that video is going to get more reach, attracting more people. And if you have a call to action at the end, back to your free email course, your checklist, your guide or whatever else, then you're getting more people on your email list. If you imagine, you know, the flywheel goes around, every step moves super smoothly into the next. It gets easier with each rotation, right? We can optimize our conversion rates, make our landing page better, our calls to action, all of that, and then it produces more with every rotation. Because the first rotation I had a thousand people to point to YouTube rotation 25. I might have 5,000 people. And so I have five times as much attention to direct back to drive newsletter. And so it's getting me views on YouTube. And if anything were to ever happen to my channel or I would decide, oh, I want to do the same Strategy, but on LinkedIn or on some other platform, well, guess What? I have 5,000 people that are engaged with my stuff that I can point to anywhere. You see flywheels like that play out all the time, and I think a lot of people do them, but they don't clearly understand how simple of a flywheel it is. They don't view it in that way.
- [38:21]
Hala Taha
Yeah, and if you view it in that way, you can pay attention to what's breaking down or how can I make this better and faster? And the other thing that you didn't really mention is the acceleration through the engagement that you get with people commenting and watching the video is actually going to boost the video being shared through interspaced algorithms. The way that I think about email is that it's sort of like old school social media. So algorithms used to be friend graph based, where it was based on how many people you had following you, and if you put out a post, it was basically top of the feed based on recency. So it was all based on just a chronicological timeline, how many followers you had. And then now algorithms are totally different. You don't have control. To your point, even if you have a hundred thousand subscribers, a hundred thousand people are not going to see your stuff. It's all based on interest, relevancy and what those users are searching for and finding. And you only get sent to them if you have engagement and if that user is actually looking for that content and actively searching for it and engaging on content similar to yours. Whereas email is just old algorithm. So it's like a social media platform that you basically control and there's no algorithm to work through.
- [39:38]
Nathan Barry
You're exactly right. And we could complain about the new social media algorithms and be like, oh, it's not fair that I work so hard for these 10,000 YouTube subscribers and only 10% of them are going to see my new video. Or you could instead accept that that's the way that it is. And in a way this is good because before, if you had amazing content, it might get to double the number of people that you normally reach. Now on LinkedIn, YouTube, Instagram, if you have amazing content, it might reach 10 to 50 times as many people as you normally reach. And so you want to Play both games where you say, okay, all the social platforms have moved to reach and discovery and interest based. And so let's play that game really well. Let's make our content really, really shareable. And everything is a double edged sword. And so wins there means that we're not gonna reach the same number of people with our content that doesn't go viral or spread. And that's okay because that's why we have the email list. And so we get to have this steady foundation that we just keep adding another layer of bricks to every time as we build up, you know, this amazing foundation of our email list. And then we ride the spikes and the viral waves and everything else of social media because then it's a huge asset for us the fact that the algorithms are so over indexed on distribution.
- [41:03]
Hala Taha
Let's talk about ladders of wealth creation. So you've got this framework about ladders of wealth creation. I'd love for you to break down the different stages and then I want to play a game with you related to this.
- [41:16]
Nathan Barry
So the ladders of wealth. This is an essay that I wrote a few years ago based on just observations in the world. I was really confused, like, wait, why do some people make way more money than other people? Why is there a big difference between income that you earn and actual wealth? And then even going back to my web design days, why is it that when someone says, oh, I have this idea for a new app, it's going to be Uber for dog walkers, why do I immediately cringe and be like, oh God no, you should never do that, that's insanely hard. And so I tried to make one framework that breaks this down and that's the ladders of wealth. And so I have four different ladders. And the idea is that as you move up between these ladders and move across between ladders, then your ability to earn and your ability to build wealth increases, but at the same time the difficulty increases and you have to learn skills all the way along. The key thing in making money is that it's a skill. And so you have to learn the skills as you move along. And if you try to do something wild and crazy like jump all the way from the bottom of Ladder 1 to the top of Ladder 4, which Building a social network or building a Uber for dog walkers, a marketplace, it's like the hardest thing you could ever do. And if you try to do that without any skills, it's not going to work. And so instead how do we layer these things on gradually so that first ladder Is just time for money. And this is where usually we all start. This was me, $6 an hour at Wendy's, and I had to learn some skills there, how to show up, how to do what I say I was going to do. You know, have the outside accountability. If I don't show up on time, I'm going to get fired. You do that three times in a row, and they're going to be like, get out of here. But on that ladder of time for money, you can go pretty high. I jumped off that ladder onto the next one pretty quickly. But a doctor, many doctors are still on that ladder. Just their salary is really, really high. But earnings are ultimately capped. If you jump to the next ladder. It's your own services business. This is you trading, working for someone else for being the owner. And at the base of that, maybe you're doing hourly work for a client. We gotta learn some new skills now, because no one's making you show up on time. No one's making you do the work.
- [43:34]
Hala Taha
Is this you solo right now? In this second rung, you solo providing services like freelancing?
- [43:39]
Nathan Barry
Yes, exactly.
- [43:40]
Hala Taha
Okay.
- [43:41]
Nathan Barry
And then if we move up, we gotta learn how to charge by the project. That's a whole set of skills. You can earn way more money if you get a little bit of separation between, hey, I'll build this website for $50 an hour to, I'll build you this website for a thousand dollars. All of a sudden, ooh, if this takes less than 20 hours, our hourly rate just went up. You can learn a lot in there. And then as you move to the top of that ladder, we're talking about, like, managing a team and doing service work. We've introduced a little more leverage all the way throughout these ladders. We're getting more and more leverage as we go. So now I could pay someone else to do that work. And there's a lot of skills that we've learned up until this point. Now, if you jump to the next ladder, which is productized services, really productizing anything, then you're starting to sell, like, a fixed scope for a fixed price. So that might be like, hey, I do web design audits for a thousand dollars. But the key thing here is you have to learn somewhere in this journey how to sell without a conversation. When I'm selling web design services, you and I are going to talk over zoom, or we're going to go out to coffee and I'm selling one to one. But if I'm doing a product service, I'd be able to Sell it on a website. And I need you to buy without talking to me. Whether it's a hundred dollar consultation call or a $10,000 custom project. I need to get to the point that the copywriting is there. I need a website, I need a domain, I need payment processing. And then as you keep going up, you can get into recurring revenue. So maybe it's like, hey, I'm going to edit four videos a month for you. And that is a recurring retainer that you pay for at a thousand dollars a month. All of a sudden I get 10 or 15 of those clients and I've got a good process. All that, like I'm making good money. And it's recurrent. You're learning all kinds of stuff. So that's ladder three and then ladder four. The final ladder is selling products. There's versions of this. That's really easy. And then all the way up to things that are really, really hard. And so like an easy thing is selling an ebook, right? It's fairly easy to make an ebook relative to like making software. But we still have to sell it. We still need those skills from the previous ladder of how to make a website, how to process payments, how to do copywriting. Those skills still come in handy. Other things are you could sell into an existing marketplace. So let's say that a product you could do is you could have a guest house that you rent out on Airbnb. You don't have to really create demand for that because Airbnb is doing that for you. You're putting it into a marketplace. And so that's great because now when you have to make the product and create the demand and all of that, that's hard. Or for me, when I was selling iPhone apps, I had to make the product. Software was hard, but it's, you know, the App store already exists. People are going on there searching for things to solve their problems. So I'm selling it to an existing marketplace. But then as you work your way up, physical products, e commerce, those are really hard. Software as a service is really hard. And then at the very pinnacle is marketplaces and social networks. Because anytime there's network effects involved, it takes so much to get traction. And there's just an insane amount of complexities.
- [47:00]
Hala Taha
Creating a network is like the top.
- [47:02]
Nathan Barry
Yeah, it's the hardest thing to do in business because if you think about Craigslist or something like that, it doesn't provide immediate value. It's only good if I come there looking for things and those things are actually there to buy. Or if you're selling something and there's actually people coming to buy it. And so it's just really, really hard problems to solve when you have to get two sides of a marketplace at once.
- [47:31]
Hala Taha
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- [48:58]
Nathan Barry
Foreign.
- [49:02]
Hala Taha
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- [52:03]
Nathan Barry
Time for money. Second one is building your own services business, really working for yourself. Third is productizing that in some way, really being able to sell without someone else there, without a direct conversation. And then the last one is products all the way up. And there's really a lot to it. But with that framework, you can understand how, first, if you switch ladders, you should expect your income to decrease temporarily. When I switched ladders from running my services business to productized services, my income went down quite a bit, even moving between rungs on the ladder. When I went from selling digital products, I was making $250,000 a year. And I'm like, you know what? I'm going to climb this ladder and I'm going to do software as a service. My income dipped down super low. It took me six years to make $250,000 a year again. So you should expect that moving ladders or moving rungs means a dip in income. The next thing is that you can skip ahead. So you could say, I'm going to go from working a job to. To jumping all the way ahead and selling digital products. You can do that, but you still have to learn all the steps along the way, all the skills at each step, so you can learn them gradually. Or you can say, I'm going to make this huge leap, and it might take you years to achieve this thing at the end because you still have to learn how to file for an llc. You know, all of the stuff that you would have learned in the bottom of Ladder 2, but now you got to learn it as you jumped all the way to the bottom of Ladder 4. And I think the third thing that's really important is an audience will help you make this jump. And that's what you and I have learned. You know, the defining factor of our careers is that we end up with hundreds, thousands, tens of thousands of people who follow our journeys and watch us make these leaps across ladders or climbing rungs or try new things, and they cheer us on and they support us at that, and they make introductions. So when you're saying, you know what? I'm gonna start a podcast network, which is an incredibly hard thing to do.
- [54:00]
Hala Taha
Is that Ladder four? I was gonna ask you, is that four or three?
- [54:03]
Nathan Barry
You could make an argument for either case, because you are prioritizing and standardizing some of these services. You're selling advertisements, you know, helping to book demand and all that. But you're starting to get these network effects.
- [54:16]
Hala Taha
Yeah, maybe in between. 3.5.
- [54:19]
Nathan Barry
Yes. You know, as you really have this, this community and this audience, they're cheering for you and they're helping to make you successful. And so as you make these jumps between ladders or you climb up, your chance of success is more than double based on the fact that you have an audience. Imagine trying to build a podcast network.
- [54:38]
Hala Taha
But you never had a podcast, you never had sponsorships, you never ran an agency. Yeah.
- [54:42]
Nathan Barry
Or a behind the scenes person. Right. So maybe you did all of those things, but you were just behind the scenes and you had no public reputation.
- [54:50]
Hala Taha
That'd be way harder.
- [54:52]
Nathan Barry
So there are things that you can do in this journey of building wealth that give you insane advantages and it usually comes back to what has leverage.
- [55:01]
Hala Taha
Okay, so let's dig into this a bit because I love this idea of creator ladder. So I'm going to read a type of creator to you. We're going to play a game. I want you to tell me what rung they're on and what skills they need to learn or things they need to do to move up to the next level. We'll go to the first one, an Etsy creator who's making and shipping handmade jewelry.
- [55:25]
Nathan Barry
So they're selling products, but it's, it feels a lot like maybe a productized service because it's handmade. And so if you think about, if we want to introduce more leverage into this, we have two aspects of that we can do it. First, we need to get more attention. We're selling it to an existing ecosystem on Etsy, but if we had our own audience, that would drive more sales. And then the other thing is we need to be able to manufacture the product better. So if it stays handmade, we're always going to be capped unless we hire more people. So the handmade version is really, I would call it a product as service because you are directly tied to the output. But you know it's being sold online without you having a conversation. You're not having to call it me like, hey Hala, I'd love for you to buy. You know, you're not doing one to one sales. Like you've got this mass sales. So it is a productized service and if we wanted to move to a product that has scale, then we would have to automate or be able to manufacture in bulk either through hiring 20 more people who are doing that handcrafted work at scale or by switching to something that could be manufactured in a factory.
- [56:38]
Hala Taha
And to your point, not just Leveraging Etsy's brand. Right. And their audience. Creating your own audience. Okay. A TikTok influencer with 250,000 followers who only earns money from brand deals.
- [56:51]
Nathan Barry
Yeah, you're selling a service at that point. And so you might have some of those people coming to you, those brands, saying, hey, I'd love to get in front of your audience, but ultimately you're saying, okay, a series of Featured posts, that's $10,000 or $8,000, and here's what we could offer. And they're going to say, oh, do you. Can you include an email to your email list at the same time? Everything is bespoke and custom. You could prioritize that more where you could say, hey, if you want to get in front of my audience, fill out this form, pay automatically, and we don't get on a call. But that's still very much a productized service.
- [57:24]
Hala Taha
What would they do to scale that?
- [57:26]
Nathan Barry
Selling their own products is a game changer. There's a group of people that are incredibly good at selling sponsorships. They make a huge amount of money in sponsorships. You're one of them. But most creators earn significantly more money for the same level of attention if they're selling their own products.
- [57:45]
Hala Taha
And is courses a product to you?
- [57:47]
Nathan Barry
Oh, yeah, absolutely.
- [57:47]
Hala Taha
Okay.
- [57:48]
Nathan Barry
And you know, you watch these creators make hundreds of thousands of dollars or millions of dollars off of their digital products, whether it's courses or something else, that is absolutely moving into Ladder 4. And then they're going to earn so much more. Let's say that Go back to Covid or even 2022. Both those times, brand dollars really dried up. So the creators who were selling their own products, their income stayed way more consistent than those that were relying on whether brands felt like the current interest rates meant that it was a good time to be spending money.
- [58:22]
Hala Taha
And that's another great thing about an audience, is that you can pivot really quickly because you always have people that want to buy from you. So I feel like this is a really good transition. We mentioned courses, and I know you have another philosophy that you always talk about, which is teaching everything that you know and not holding back in terms of what you're teaching. So talk to us about how teaching really builds trust.
- [58:44]
Nathan Barry
Teaching Everything youg Know really came from this idea of what should I teach and why should anyone listen to me? Because I always thought that there were beginners and then intermediate people and practitioners who we learn things and we implemented. And then there's this other group over here, and they are the experts. And I can't teach something until I'm an expert. Otherwise people will laugh at me. They'll make fun of me, and they'll be like, nathan, who do you think you are to be out here teaching? Where's your degree? Where's all of that? Right? Like, they're going to find out you dropped out of college. You have no credibility. And so I would see people making money and building a blog and all of that teaching, and I'd be like, oh, man, I wish I was an expert like them. But then I realized something. People don't teach because they're experts. We perceive them as experts, but because they teach. And you can actually look throughout history at key historical figures that we know now and start to break it down and be like, wait, hold on. Why do we know that? Like, if I say Marco Polo, we know who Marco Polo was, right? He explored the Silk Road. He did all of this. He was the first to discover the path to China. He wasn't at all. Plenty of people had done it before him. And so you're like, wait a second. He went along on a trip with his uncles. I couldn't tell you his uncle's names. We know Marco Polo's name because he wrote about it. He didn't say, now that I am the person who discovered this and I am the foremost expert on the Silk Road to China. I will write about it from my place of expertise. No, he was just the one to document it. Same thing with Paul Revere in the famous Lanterns where the British are Coming, all of that. There were a bunch of writers that went out, but Paul Revere's name is mentioned in the famous poem. And so that's why we know who he is. And so you don't take this approach of saying, oh, I have to be an expert and then I'll teach. Then you say, okay, I'm going to teach everything that I know. If I learned something last week, I'm going to teach it. I'm going to document that because there's someone else who's following along behind me, and that'll be useful to them. When I was learning how to program, I was learning to install Ruby on Rails on my computer. And this is like the most basic thing, and I could not figure it out. And I read these articles from the experts, people who made the programming languages, who built the frameworks, all this stuff. I followed their tutorials step by step, and I could not figure it out. And then I came across this tutorial from someone who was a beginner and said, hey, here's how I did it as a beginner. And something that was so obvious to the experts that they'd skipped over the beginner was like, hey, this part really matters. I got stuck on this. I was like, thank you so much. Because from their place of expertise, they're like, how would anyone not know to do step C? Like, that's obvious. I didn't even mention it. It was so obvious. But as a beginner, that was what I needed. I needed someone to speak to the beginner level. And ever since I encountered that understanding why we know Marco Polo and Paul Revere and all of these names, I realized, oh, I just have to teach everything that I know. It's not. Is this important enough? Am I important or famous enough? Do I have credentials to say that I'm valid to teach this? It's like, no. Here's something that I learned, here's when I learned it, and life experience that I learned it from, and I hope it's useful to you or someone else. And that built my entire audience, it built my entire career. And I got over all the imposter syndrome. Cause I'm like, I'm not an expert. I'm just a guy. And I'm going to say, like, here's what I learned last week. I hope it's helpful to you. And turns out tens of thousands of people are like, yes, that was helpful to me. Thank you very much.
- [62:17]
Hala Taha
I feel like that is such a good learning lesson for anybody who's a creator and has imposter syndrome of being worried about putting content online. Something that I also say related to this is that everybody has their own relationship with their audience. I think about myself when I first started as a podcaster and my relationship was a reporter. I would interview experts, and then I would report out what I learned. I wasn't necessarily expert, but I would report it out. Some people can be a cheerleader or like a hype man. Some people are more of a mentor or a teacher or something like this. You don't always have to be the expert. But I love the way that you phrased it like that. You should just teach everything you know. And even if it's the beginner level, some people might need that.
- [63:02]
Nathan Barry
Yeah. And I think that now information is everywhere. It used to be that information had a premium to it. Like, oh, we were hungry for new information. Now there's just a surplus of it. Now what I think we're looking for is we're looking for stories. And so we want to learn things, but we want to do it following someone going on a journey. There's a, I think he's probably 19 or 20 years old. So like a kid who's in college who is going on this journey to fly a plane all the way around the world to every continent and he's putting that whole thing on Instagram. And I love following it because here's someone doing something hard and going on a journey. If you are trying to learn anything, whether it's computer programming or sewing or building an audience or all of that, go on a journey and say, here's who I am, here's what I'm trying to learn. And I'm going to document everything I learned along the way. And you will just see so many doors open to you where people are like, oh, I'd love to help you with that, or thank you so much for sharing that I'm going to go on the same journey or I'm six months behind you or whatever else. And then you're also not stuck in this problem of what do I share and teach. You're just like, well, let me share what I learned this week. And it feels relevant and actionable and it comes from a very human place. Whereas today, so much content, like if we want the facts, go to ChatGPT. ChatGPT is great at facts. I want to learn the facts, but I want to learn it from the human experience and I want to learn it from following an actual person.
- [64:29]
Hala Taha
I want to go back to your entrepreneurship journey because what you've built with Kit is so impressive. The more that I get to know you and get to know your background and just how impressive your company is. Now that I'm transferring my stuff over to Kit, I saw your awesome studios. You're building all these amazing studios. First of all, I know you're really transparent with your financials, so I'm happy to ask you this question. How much money did you make last year?
- [64:54]
Nathan Barry
We made about $40 million last year.
- [64:56]
Hala Taha
Incredible.
- [64:57]
Nathan Barry
And we're on track to make about 50 million this year.
- [65:00]
Hala Taha
And how much was profit of that?
- [65:03]
Nathan Barry
Profit was about 7%. So handful of millions. We invest very heavily, you know, so we're trying to see what can we spend money on that makes creator businesses better. And most of the time that's a whole lot of software engineers and building a better product. But then also it's things like Kit Studios where we build out world class production studios. We have Boise where I am now, we've got Chicago and we're working on New York City.
- [65:28]
Hala Taha
And you have some huge creators. You have Tim Ferriss, who we mentioned earlier, who are some of the big creators on KIT now.
- [65:35]
Nathan Barry
Oh, man, there's so many. You've got everything from celebrities like Dua lipa and Matthew McConaughey, Tom Brady, through to the biggest content creators like Andrew Huberman, James Clear, Tim Ferriss. You got comedians like Hasan Minhaj. Any industry, we have pretty much the biggest names. There's 63,000 paying customers that Kit has, and we power an insane number of newsletters now, which is pretty wild considering it started as a better way for me to grow an audience.
- [66:05]
Hala Taha
Yeah, your own app that you created, it is really, really wild. But it just goes to show that whole, like, you can't skip the ladders. You had all the foundation to become the entrepreneur that you are and to have the company you have. Same thing with me. It was like I had to take it step by step until I had the pinnacle of what a podcaster could have in terms of the industry. You know, why do you make your financial so transparent?
- [66:29]
Nathan Barry
I grew up in an environment where money was very scarce, and I did not understand how money is made. It was a secret, it was a mystery. And when I went to negotiate my first salary, I didn't even know how to do that. My dad didn't come from that world, so I didn't ask him. I called up my girlfriend's dad and was like, hey, I'm gonna have to negotiate a salary on Monday, and I don't know how to do it. He was like, oh, come on over. I'll tell you. So he gave me all those tips and then gave me a little book that someone had written on salary negotiation, and that worked out super well. I actually have a funny story on this. So in the salary negotiation book, they were saying, like, don't speak first on salary. And when someone says a salary, be really thoughtful in the response. Like, don't just jump on it right away and be like, yes, that'd be great. Or like, no, that won't work. Like, be very thoughtful and considerate. And so I had thought if I could get 45 to $50,000 a year in this job in 2009, that would be amazing. We're sitting down to lunch with the COO of this company we're talking through, and I had made a crucial mistake, or it ended up being a great move. I had ordered this bagel sandwich, which is very hard to chew, and so I picked up my sandwich, and right as I'm taking a Bite. He says, we'd like to offer you the job at $50,000 a year. And I took this bite. Too big of a bite. And so I'm chewing, and I was raised with good manners. And so you don't talk with your mouthful. And so in my head, I'm going to $50,000 a year. That's more than I was expecting. Like, that would be fantastic. Instant. Yes. But I'm still chewing and chewing. And so then he starts to get a little uncomfortable. Like, did he just offend me with the, you know, like, was that too low of a number? And he's like, 50, or, you know, we could use $60,000 a year. And I like, finish chewing and say, $60,000 a day. You're great. Thank you. And so in that time that I took the bite, I, like, implemented the feedback from the book. Salary negotiation is a skill. Basically, I moved up a little bit in the ladder, but really it came down to the fact that I had worse timed bite. And that really good luck ended up making me an extra $10,000.
- [68:39]
Hala Taha
I love that story. Yeah. Silence is so powerful, people. If you just are silent, people will want to fill in that space with just more information. So that's such a good negotiation tactic. All right, so you told us why you share your financials. You also bootstrapped your company. Correct. You never took any money and you. I found out. I had no idea about this. I can't believe I didn't know that Spotify offered you $200 million and you turned it down. Why? It's a lot of money. A hundred million dollars is my number for yap media. Like, I would love to be valued at a hundred million dollar company and exit. That's really big. So why did you turn it down?
- [69:19]
Nathan Barry
You know, I always said, I'm not gonna sell this company because I love what I'm doing. I love the community that I'm serving, all of that. And then that's easy to say when it's offers from private equity or they're not that compelling. But Spotify has a big brand saying, hey, we're interested in buying you. We'd love to talk. Here's 200 million is kind of the number we're thinking about. That was really compelling. And so I had to actually, like, go sit down and journal on it and say, all right, do I want to do this? You know, and really I thought about, okay, what would I do with $200 million? Right. Cause I haven't raised any outside capital. I still own 85% of the business.
- [69:54]
Hala Taha
Today I was gonna ask you, how much do you own?
- [69:56]
Nathan Barry
Yeah, it's a lot. And so in that, I really realized that I was gonna go back and do the exact same thing. I wanted to build a platform serving creators, and I like to make things. You know, in the early days, I'd make something and no one would see it. Today I make something, and, like, 60,000 people use it the next day, and that's super special. I love the impact, and I love the team that I work with. And, you know, there's people who are like, oh, I want to be a solopreneur, and I'm thrilled for them. That's not what I want. I love working with a team. And so I realized I would just turn around and do the exact same thing that I want to do now or that I'm doing right now. And so I realized, like, no, I don't want to sell. The other thing is, you know, they say the first rule of compounding is to not interrupt it prematurely. And we mentioned mailchimp early on. And even though I started my business because I was frustrated with their product, I really, really admire their business. They built that business for more than 20 years. It took them eight years to hit their first million in revenue, and they exited doing a billion in revenue, and they sold for $12 billion. And so I'm realizing, like, I'm enjoying the journey. I'm meeting people, sharing the journey, basically doing my life's work, and I get to keep doing it year after year, and I get to keep compounding.
- [71:13]
Hala Taha
And you're making great money.
- [71:14]
Nathan Barry
Yeah. And so I'm very passionate about what we're doing. And if I, like, I don't know, did a time machine and somehow woke up 10 years from now, and someone was like, yeah, you're still running Kit. I'd be like, okay, yeah, that makes sense. I would not be surprised at all if 10 years from now, I'm still running the exact same company.
- [71:32]
Hala Taha
So talk to me about. You have 85% of your equity. So just curious about how selfishly how you've approached giving away equity. Is it to your team? Is it for investments? Have you ever given away equity to your team?
- [71:45]
Nathan Barry
All the equity that I've given away has been to the team. A few team members over time have sold equity to outside investors in these secondary rounds that we've helped facilitate. But really, I just, based on the role and the market, offer them equity invests over four years. And then we do refresher grants as you Know, I've got people that have been on my team for eight years or more and it just really helps for team members to be deeply invested, for them to share in the upside. And I think just for us to be totally aligned. So actually think about compensation in four quadrants. So if you imagine a grid, you know, a little two by two grid, and across the top we've got guaranteed versus performance based. And then alongside we have short term versus long term. So short term guaranteed is salary, long term guaranteed is a 401k match, and short term performance based is profit sharing. And then long term performance based is equity. And I think that the best compensation packages for your team really hit on all four of those things. And so you're not saying, oh, I'm barely going to pay you anything, but here's a bunch of equity and in this moonshot, if we hit it big, you'll be rich, or I'm not going the other way like mailchimp did and saying, oh, we're never going to sell, so we're only paying cash. And then years later, when they do sell for $12 billion, the employees barely make anything. You can actually just walk this middle line and say, look, we're profitable, we're paying good salaries, we're contributing your 401k, but you also have equity and we can have this really balanced package. That's the way that I think about it.
- [73:20]
Hala Taha
Do you consider any of your employees to be your business partners or no?
- [73:24]
Nathan Barry
No, I've never had a co founder at that level. Now I have an executive team that's amazing. And we've built them up over time and really recruited. And so we have this core group that really runs the business. And even if I were to take a step back, they would run the business, but never had a co founder.
- [73:42]
Hala Taha
Something else that was interesting with your entrepreneurship journey. You launched your company with 5, 000 and you were public about the launch of this company. Why did you make that launch public facing and transparent like that?
- [73:59]
Nathan Barry
I learned the power of an audience and then audience was going to do a couple things for me. First, if I had thousands of people following my journey, I knew they'd help me. And that happened a lot where I'd say, hey, I'm really struggling with copywriting. How do you write a sales page for a software company and not make it generic and boring? Well, someone in my audience who's an amazing copywriter, her name's Amy Hoy, said, oh, let's jump on Skype. I'll help you with that, you can tell it was a long time ago. It was referenced Skype.
- [74:25]
Hala Taha
Yeah.
- [74:25]
Nathan Barry
And so she did. And I wrote a post about that where I'd be able to call other people up for advice. The next thing is, it gave me accountability. I had a bad habit of jumping in on something and working on it for a couple weeks and then losing energy and momentum. That's tough. But I knew that if there were hundreds or thousands of people being like, so, Nathan, what progress did you make on your business this week? That I would actually make progress and stay consistent. And then the last thing is, I knew it would help me get customers. I wasn't exactly targeting content creators with all of my blog posts about building a software company, but I knew there was overlap. And so those three things made it absolutely worth it to go on this journey in public and tell the story that I along the way. And a fun little side effect is that I have all these great blog posts about what I was thinking in March 2013 when we got our first customers or pre sold this or that. And, you know, it's just such a special thing to have years later.
- [75:22]
Hala Taha
You must be really proud of the little baby steps that you took in the beginning.
- [75:27]
Nathan Barry
Yes, 100%.
- [75:28]
Hala Taha
Okay, last question for you, and then we're going to close out this interview. AI is taking over the creator economy, world. Tell us what you think, the good and the bad of AI. What's your perspective?
- [75:41]
Nathan Barry
Yeah, so I think that technology has always innovated everything that we're doing. The industrial revolution that ended a whole bunch of farm jobs, but ultimately, I think society was better off because of it. The printing press, the Internet, all of these things require huge technological shifts that are required for you and I to be doing what we're doing now. And I think AI is probably bigger than all of those combined. And so it's hard to know what's going to happen. I think that on the good side, we've democratized so many things. If you want a really great book editor, someone who's going to critique all of your work or your essays, AI is just sitting right there for 20 bucks a month. And you can be like, hey, what are all the logical flaws in my argument here? And it'll be like, oh, let me tell you. And it'll be like, you made a leap here. This is a personal anecdote that you extrapolated all this stuff. You used to have to pay thousands of dollars for someone to do that. There's all kinds of busy work that you don't have to do anymore. Similar to how Figma and Photoshop made design so much faster. Well, now you're getting a much bigger leap in AI. It just happens to hit every single industry. The other side of it is it's easier to generate nonsense than ever before and just noise. And so what do you do to stand out as a creator in a world where we can just generate whole creators? So I think you have to tell more personal stories. I think you have to connect with your audience. You have to think before you write something or before you podcast it. Like, is this unique to me or could anyone share this anecdote? One thing that I'm worried about is AI taking out the bottom rung of every career ladder. Because if you think about maybe a partner at a law firm isn't going to be replaced by AI, but the junior associates are the beginner web designer. Well, you know, cursor and replit and all these pretty good at doing that. And so you have these experts at the top of their careers Wielding AI to do like 10 times what they could possibly before and no longer needing the junior associates and whatever else. And they have the all the expertise and discernment to know, oh, this is great output. This is not. But I worry that if AI eliminates the bottom rungs of all of these jobs, then no one's learning how to do that. I was talking to a friend of a friend who's a college professor and he was saying he allows everyone to use AI in the classroom, writing papers, all of that. He has no problem with that because that's the future. That's what's expected. The problem that he has is that no one's doing the reading anymore. And so instead of reading this literature or these great works or all these other things that you could really learn from and build taste, now everyone's just saying, hey chatgpt, what's the summary of this book? Okay, cool, now I can do this thing. And so I'm worried about what happens if in 15 years no one has a sense of taste and style and all of that and really these fundamental skills. And so if we can get all the benefits from AI and really learn the taste and the wisdom and the skills necessary for that world. I think we're going to be in a great shape if we continue to eliminate the bottom rungs and the next generation doesn't learn all these core things, then I think we've got a serious problem.
- [78:48]
Hala Taha
Wow, that was really eye opening. Like, I never thought about it that way. So I'm really glad that you brought it up. For everybody tuning in, who's more in their, like, 30s and 40s, I feel like we're in a better situation. Cause we have a lot of the foundational skills. And everybody who's younger, I think the lesson is still learn those skills. Still try to learn everything you can and not just skip over and get the Cliff notes of everything.
- [79:12]
Nathan Barry
Actually read the books.
- [79:13]
Hala Taha
Yeah, actually read the books. Nathan. I always close my show with two questions I ask all my guests. The the first one is, what is one actionable thing our young and profits can do today to become more profitable tomorrow?
- [79:26]
Nathan Barry
Document your journey. If you do that, the thing that you just learned, whether you do it on a daily Instagram post or a weekly newsletter, any of those things, just document that journey. Even if it's just for you, you'll be blown away at the skills that you build and how much better you get in six months or a year. And that's worth doing it just for that reason. But chances are you'll end up building a following of hundreds or thousands of people who want to help you achieve your dreams.
- [79:53]
Hala Taha
And what would you say your secret to profiting in life is?
- [79:57]
Nathan Barry
I look for leverage wherever I can. I would read a book called the Almanac of Naval Ravikant. It sounds like an intimidating book.
- [80:04]
Hala Taha
Almanac of what? Revolve what?
- [80:06]
Nathan Barry
The Almanac of Naval Ravikant. Naval is a famous investor. I think he's a billionaire, Very, very successful guy who's like sort of a business philosopher. And my friend Eric wrote this book of all of his wisdom, including he has a Twitter thread called how to Get Rich without Getting Lucky. And, you know, just all these great things. But really the core thing is that this book breaks down leverage and helps you understand the four types of leverage, how to implement it in your life and business. And if you do that, you'll just have an easier time in everything that you do.
- [80:41]
Hala Taha
I love that I'm gonna get that book and I'm actually gonna read it.
- [80:44]
Nathan Barry
Do it.
- [80:45]
Hala Taha
Nathan, thank you so much for your time. Where can everybody learn more about you? Kit and everything that you do?
- [80:51]
Nathan Barry
I have a podcast called the Nathan Bears Show. It's had amazing guests like Mark Manson and yours truly. Thanks for coming on.
- [80:59]
Hala Taha
Yeah, it's fun.
- [81:00]
Nathan Barry
So check that out if you love podcasts and then go to kit.com if you want to build the newsletter and have email powering your creator business.
- [81:08]
Hala Taha
Amazing, Nathan. I'll stick all those links in the show notes. This was an awesome interview. I'M so excited to put it out. Thank you so much for your time.
- [81:15]
Nathan Barry
Yeah, thank you.
- [81:20]
Hala Taha
Yap gang. Hearing Nathan go from shy kid to flipping burgers, to turning down a $200 million offer and then building kit into a $40 million a year business was just so inspirational. That's the power of betting on yourself. That's the power of the creator economy. Because in today's world, when you build an audience, you build leverage. And with leverage, you build freedom. Nathan didn't just build a business. He built momentum, trust, and long term impact one piece of content at a time. So if you're a creator, founder, or aspiring entrepreneur, I hope you feel as fired up as I do right now. Because what Nathan just gave us isn't just advice. It's a roadmap for building a business and a life on your own terms. And the creator economy, leverage is everything. Nathan reminded us that building an audience isn't about likes or followers. It's about trust and distribution, two of the most powerful assets you can own. When you nurture that audience, collaborate with others, and reinvest your momentum, you activate the creator flywheel, A loop that doesn't just grow your business, it sustains it. You stop pushing uphill and start spending, spinning with purpose. We also got deep into Nathan's ladders of wealth creation, a framework every entrepreneur needs to understand. If you've ever felt stuck trading time for money, Nathan's breakdown shows you how to start climbing. Whether you're freelancing, running a service business, or just getting started with digital products, the goal is the same. Build leverage, create equity, and learn the skills that take you to the next rung. And don't forget sweet. Switching ladders might slow you down temporarily, but skipping the learning never works. Your audience is your shortcut. Your content is your currency. And here's something that truly stuck with me. People don't teach because they're experts. They're perceived as experts because they teach. That's the heartbeat of Nathan's teach everything you know philosophy. You don't have to wait until you're perfect. Share the journey. Share your lessons. Share what you just learned yesterday. Because teaching doesn't just grow your audience, it makes you magnetic. And it turns creators into leaders. And yes, AI is changing the game. But Nasin gave us the simplest way to stand out. Tell personal stories. Make it uniquely yours. Because while algorithms may prioritize reach, people prioritize connection. So if you're listening to this and building something, whether you're writing a newsletter, coaching clients, or launching a course or still figuring it out. Just remember you you already have what it takes to create leverage. You already have stories worth teaching, and you're already on the ladder. Your only job is to keep on climbing. Thanks so much for tuning in to this episode of Young and Profiting Podcast. If this conversation with Nathan Berry lit a fire under you, if it got you thinking bigger, dreaming bolder, or finally seeing that next step on your creator path, then don't keep it to yourself. Share it with a friend or fellow builder or somebody who's ready to stop playing small and start small scaling smart. And hey, if this episode gave you even one idea you can use to grow, thrive or level up, do us a quick favor and leave a five star review on Apple Podcasts, Spotify or wherever you're listening right now. That small action makes a huge difference to us at Young and Profiting Podcast. If you want to check out all of our videos, you can head over to YouTube. If you want to follow me, you can do so at Yap with Hala or LinkedIn. Just search for my name. It's Hala Taha. And of course, a massive shout out to my YAP team. As always, you guys are awesome. This is your host Hala Taha, AKA the Podcast Princess, signing off.