WEBVTT - Quick Win: ConvertKit's Nathan Barry on how flywheels transformed his business

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<v Speaker 1>In the world of business and startups, how do you

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<v Speaker 1>turn hard manual effort into effortless momentum. Nathan Barry, the

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<v Speaker 1>founder and CEO of convert Kit, has found a way,

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<v Speaker 1>and it all comes down to a concept from physics

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<v Speaker 1>called a flywheel. So what on earth is a flywheel

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<v Speaker 1>and how did Nathan use the concept to revolutionize convert

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<v Speaker 1>Kit's sales process and tobocharge his company's growth. Welcome to

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<v Speaker 1>How I Work, a show about habits, rituals, and strategies

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<v Speaker 1>for optimizing your day. I'm your host, doctor Amantha Imber.

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<v Speaker 1>On today's quick Win episode, we go back to an

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<v Speaker 1>interview from the past and I pick out a quick

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<v Speaker 1>win that you can apply today. In today's show, I

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<v Speaker 1>speak with Nathan Barry about how he applied flywheels to

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<v Speaker 1>grow convert Kit.

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<v Speaker 2>Yeah, so a flywheel is a concert than physics really

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<v Speaker 2>of taking manual effort and then transferring it into something

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<v Speaker 2>that like either storing the energy or carrying it forward.

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<v Speaker 2>So the first time that I encountered a flywheel was

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<v Speaker 2>in two thousand and eight and I was in Lisutu,

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<v Speaker 2>which is the landlocked country inside of South Africa, and

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<v Speaker 2>we were working at an orphanage and we had drilled

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<v Speaker 2>a well and we were going to put a pump

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<v Speaker 2>on top of the well. And Masera, the capital city

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<v Speaker 2>where we were at, had electricity, but in the two

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<v Speaker 2>weeks we were there, I think it went out like

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<v Speaker 2>eight times. So we didn't really want to put in

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<v Speaker 2>an electric pump on this well, and so I was

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<v Speaker 2>thinking like, okay, we're adding a hand pump, and Jason,

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<v Speaker 2>one of the guys leading our trip, was like, no, no, no,

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<v Speaker 2>We're gonna put a flywheel on it. So instead of

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<v Speaker 2>the hand pump, which would be this long handle, you

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<v Speaker 2>go and pump your water and this the handle gives

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<v Speaker 2>you leverage, but there's a direct tie between the effort

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<v Speaker 2>that you put in and the impact or the results

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<v Speaker 2>that you get back. And at the moment you stopped pumping,

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<v Speaker 2>you immediately stopped getting water. And so instead of that,

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<v Speaker 2>the flywheel is this large metal wheel that sits up

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<v Speaker 2>on top of the pump. It's hard to get going initially,

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<v Speaker 2>but instead of this linear up and down movement, it

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<v Speaker 2>carries that momentum forward and it builds momentum over time.

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<v Speaker 2>It still needed input, but I could basically with one

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<v Speaker 2>or two fingers, just keep this thing spinning. And so

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<v Speaker 2>that's a metaphor. Obviously, like we get to apply it

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<v Speaker 2>to all these other areas of life and business, and

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<v Speaker 2>like we talked about health and fitness. That's a flywheel.

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<v Speaker 2>It is incredibly difficult to get going if you're starting

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<v Speaker 2>with really small changes. You're just saying, oh, I'm gonna

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<v Speaker 2>eat a piece of fruit every day. You can build

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<v Speaker 2>on from there. So I really came to three laws

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<v Speaker 2>that define a flywheel, especially in the business case. The

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<v Speaker 2>first is every step in a flywheel should flow smoothly

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<v Speaker 2>from one into the next. The second law is that

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<v Speaker 2>it should get easier with each rotation, and then the

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<v Speaker 2>third laws it should deliver more with every rotation. So

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<v Speaker 2>that's flywheels at a high level. But and we can

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<v Speaker 2>go wherever you'd like from there.

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<v Speaker 1>I would love to get an example from within convert

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<v Speaker 1>Kit in the sales process, because I think everyone listening

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<v Speaker 1>will have some kind of a sales process in their business,

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<v Speaker 1>maybe that are directly involved in sales. How have you

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<v Speaker 1>gone about applying the flywheel concept to driving sales at

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<v Speaker 1>convert Kit.

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<v Speaker 2>One of the biggest things that I did is I

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<v Speaker 2>started direct sales being a content marketer. I was thinking,

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<v Speaker 2>I'm going to grow through content, right, that is how

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<v Speaker 2>this business is going to grow. Turns out it's really

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<v Speaker 2>really hard to sell software through content, especially software that's

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<v Speaker 2>not very good yet because it's new, and so the

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<v Speaker 2>pivot to direct sales really let me grow the company

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<v Speaker 2>and get traction early on, especially because what happens when

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<v Speaker 2>selling through content is if you and I are having

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<v Speaker 2>a conversation. We're sitting across from each other at a

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<v Speaker 2>coffee shop and I'm saying, would you like to buy

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<v Speaker 2>convert it become a customer. If you were to like

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<v Speaker 2>look at me and then like push back your chair

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<v Speaker 2>and without saying anything, just get up and leave, that

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<v Speaker 2>would be socially unacceptable on so many levels. Right. If

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<v Speaker 2>I say, hey, will you buy this thing? You were

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<v Speaker 2>obligated by the rules of our society to give me

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<v Speaker 2>a response. It might be like maybe I'll think about

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<v Speaker 2>it or no, but you have to give me a response.

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<v Speaker 2>And whatever response you give me, I can learn from

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<v Speaker 2>that when you think about content marketing. That socially unacceptable

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<v Speaker 2>interaction happens all the time. I can just hit the

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<v Speaker 2>back button. I've completely rejected you. You get no feedback,

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<v Speaker 2>and that's what happens on the web. So I love

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<v Speaker 2>it when people will go into direct sales because it

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<v Speaker 2>gets them all of the feedback. So my flywheel for

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<v Speaker 2>convertant direct sales like it worked, and then now years later,

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<v Speaker 2>I'm like, why did that work? I'm like, that was

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<v Speaker 2>a flywheel and I didn't even realize it. So I

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<v Speaker 2>started just identifying potential customers. I looked at who was

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<v Speaker 2>successful and convert it, and I was like, okay, let

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<v Speaker 2>me find people like them that got me, Like lists

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<v Speaker 2>of men's fashion bloggers in New York Paley Arrecipe blog,

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<v Speaker 2>try to get as specific as possible. Then I'd reach

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<v Speaker 2>out with a personal message and I would ask about

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<v Speaker 2>what was frustrating So specifically I'd see that they're using

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<v Speaker 2>mail jump and I'd say, hey, I was wondering whether

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<v Speaker 2>what's your biggest frustration with using mailchip. The reason I

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<v Speaker 2>ask is I'm working building a tool called convert it

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<v Speaker 2>and it's used by and I would drop my the

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<v Speaker 2>only two relevant names that I had that was a

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<v Speaker 2>customer or someone else, and I just love to get

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<v Speaker 2>your feedback, right, So I'd start with that it had

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<v Speaker 2>a pretty good reply right, and people would say, oh,

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<v Speaker 2>I'm really frustrated with it's hard to tag and organize

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<v Speaker 2>my audience, it's hard to set up automations that are

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<v Speaker 2>relevant to my subscribers, things like that, which very conveniently.

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<v Speaker 2>I'd built the product because I use mail Chip, but

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<v Speaker 2>I was frustrated by these exact same things, and so

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<v Speaker 2>I'd say like, oh, here's how we're solving. I'd love

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<v Speaker 2>to get on a call and show that to you.

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<v Speaker 2>And that worked really well, and at some point I'd

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<v Speaker 2>ask for the sale and they would usually say no

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<v Speaker 2>now thankfully because we're on a call, they had to

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<v Speaker 2>tell me why. And the reason they said why was

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<v Speaker 2>usually it's too much work to migrate. We've been using

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<v Speaker 2>this other tool for three years, five years, and we're

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<v Speaker 2>deeply embedded, until finally, like, out of desperation, like it's

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<v Speaker 2>not that much work, blah blah blah, I'll do it

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<v Speaker 2>for you for free. And that's where our concierge migration

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<v Speaker 2>was born. And I would pull up their mail Chip

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<v Speaker 2>account and their can Work account here and another like copy

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<v Speaker 2>and paste over their emails and then edit all their

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<v Speaker 2>forms and switch those over. And what that did is

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<v Speaker 2>That's how I landed the customer, and then I would

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<v Speaker 2>get a testimonial and the recommendation, Hey, who else should

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<v Speaker 2>I get on? Convert it? That recommendation to other people

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<v Speaker 2>completed the loop right. It brings my flywheel background to

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<v Speaker 2>the beginning, because then now I've identified new customers. And

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<v Speaker 2>so if we go through our three laws for this

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<v Speaker 2>direct sales flywheel first is every step moves smoothly one

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<v Speaker 2>into the next. Right, migration goes to testimonial, which leads

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<v Speaker 2>to new customers or new referrals that I can then

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<v Speaker 2>talk to next. It gets easier with every rotation because

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<v Speaker 2>my prospecting got more dialed in my cold email, I

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<v Speaker 2>knew what worked. My sales calls got a lot better,

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<v Speaker 2>the product got better, and then it also drove more

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<v Speaker 2>results with every rotation because I could reach more and

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<v Speaker 2>more people. Word of mouth started to kick in a

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<v Speaker 2>little bit, and so I just noticed that that flywheel

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<v Speaker 2>was so hard to turn it first, but it got

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<v Speaker 2>just a tiny bit easier with every rotation up until

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<v Speaker 2>the point that we've just had a huge amount of

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<v Speaker 2>momentum in word of mouth.

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<v Speaker 1>That's such a great story, such a great example. I

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<v Speaker 1>love that I hope you enjoying today's Quick Win episode.

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<v Speaker 1>If you would like to hear the full chat with Nathan,

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<v Speaker 1>you can find a link to that in the show notes.

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<v Speaker 1>If you're looking for more tips to improve the way

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<v Speaker 1>you work, can Live. I write a short weekly newsletter

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<v Speaker 1>that contains tactics I've discovered that have helped me personally.

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<v Speaker 1>You can sign up for that at Amantha dot com.

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<v Speaker 1>That's Amantha dot com. If you like today's show, make

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<v Speaker 1>sure you hit follow on your podcast app to be

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<v Speaker 1>alerted when new episodes drop. How I Work was recorded

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<v Speaker 1>on the traditional land of the Warrangery people, part of

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<v Speaker 1>the Coulan Nation. A big thank you to my editor

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<v Speaker 1>Rowena Murray and Martin Nimber for doing the sound mix.