How ConvertKit Hit $597K MRR: Two Repositioning Pivots + Direct Sales = SaaS Gold

ConvertKit is one of the most talked-about startup success stories in the email marketing world. But founder Nathan Barry didn't have an easy path to success.

In fact, he almost shut down the company after 22 months of barely breaking even.

Here's the real story of how ConvertKit found product-market fit, scaled to millions in revenue, and became a major player in email marketing. I cover every story details, pivots and the hard decisions in this story, let’s dive in!

This is a newsletter written manually, not by AI.

Nathan started with a challenge of building a web SaaS to $5,000 in monthly recurring revenue within 6 months, with only an initial investment of $5,000.

But things always don’t work out as planned

July 1st, 2013, The reality was he stuck at $2480 MRR after launched it for 6 months, and that was his peak month before it declined.

Nathan’s original challenge failed, not only did he missed the MRR, and he invested more than he expected, by the time he was around $2000 MRR, he already invested in $5000, and another $5000 from clients.

He was considering about going back to his side project writing and selling books.

After nearly a year, he made an experiment selling SaaS as an info product, which make him $7000 revenue in one month. But things didn’t take off here too, the seats stopped selling and he lost motivation again.

The decision of Going ALL IN!

In October 2014 monthly recurring revenue had slid all the way down to $1,207. Which seems pretty bad.

Shut down or go all in?

I think most founders mush have come through this, in the darkest days, they lost hope, get a lot of self doubts and start thinking about their way out.

Nathan loved this tool, because it helped him grow a 30000 email list in a short time, so he made a big move to go all in this!

How things turned around for ConvertKit

With this data and declining, Nathan realized something must have been wrong, he was focusing on beginners, they complain about price, couldn’t produce content consistently and most of them canceled when their project failed.

He just can’t make profits from these people, so he started rethink about “What is ConvertKit for?”. ConvertKit lacked targeting toward a specific market segment, so no potential customers felt the product was made specifically for them.

Reposition for authors

He decided focus heavily on marketing for ConvertKit, and focus only on “email marketing for authors”. Thanks to book writing experience of Nathan, he has some insights in this.

The MRR start show a trend of healthy growing.

In the meantime, Nathan also started doing direct sales, With a more specific target, he can start reaching out to potential customers. He contacted all top sellers on LeanPub and Udemy, got 5-7 customers out of a hundred personal emails. The numbers kept growing.

New customers bring in feedback and feature requests, which make Nathan realize the flaws in ConvertKit. To fill that hole, even ConvertKit aren’t producing much revenue, Nathan invest in another $50,000 hiring a full-time developer.

The developer came form one he had known and worked with for years, Sometimes it’s pretty hard to find a good developer or co-founder, the best ones might just be someone you already know about. It’s a good start.

And that investment cost the last cash reserves of Nathan. The numbers has kept going up for 3 months sin November 2014.

Reposition Again

The data was good, but nothing fancy. Nathan built ConvertKit targeting a specific niche—"Email marketing for authors"—just like himself (he wrote two books before). While this seemed reasonable, authors tended to have the smallest accounts and were most likely to cancel.

A weekend meeting changed all that, after a 90 minutes session focused on strategies of ConvertKit. They realized these weren't their best customers. Instead, their most successful accounts came from bloggers and course creators who were making money and less likely to cancel.

So they rebrand ConvertKit to be “Email marketing for Professional Bloggers”, and start focus even more on direct sales. They talk to professional bloggers with 30000-250000 subscribers, and convince them to switch to ConvertKit.

How to do email marketing when others refuse you by default

His early sales conversations ended with this, “ConvertKit sounds great and I love what you’re about, but… switching email providers is so much work. Sorry, it’s just not going to happen.”

But Nathan dig a little deeper, out of a moment of desperation he said “It’s not that much work. I’ll prove it to you and do it all for you. For free.”

A little startled, the customers agreed. Bingo! It worked very well like a silver bullet.The prospect placed all their possible objections on a single thing: the cost of switching. By removing that concern, Nathan made them so much more likely to switch!

Finally Reached 5000 MRR(with a higher cost)

Looks like something worth celebrating, but their burn rate is now about $8,000 per month, not including my own salary. And to reach this goal, it took them 2 years, 2 months, and 9 days.

All the way grow to $30000 MRR

How he scaled the direct sales which usually don’t scale at all

Something definitely changed during 2025, but the real change happened at 2014 when PMF knocks in quietly.

What is his Growth strategies for ConvertKit

He has only one strategy: DirectSales

Plus organic growth through word-of-mouth referrals and reducing customer acquisition costs.

They got $20000 MRR only through direct sales and word-of-mouth. And then they added an affiliate program paying a 30% recurring commission.

CEO-Level Thinking

Even has a book selling business, Nathan still chose going all in ConvertKit.

Let’s review the timeline of ConvertKit’s story in 2013-2015

2013

• January — Started The Web App Challenge and started validating ConvertKit

• February — Hired a developer, ran preorders, started building.

• March — Named the product and first customers started using the alpha version.

• July — Closed out the first 6 months at about $2,000 in MRR.

• August to December — Growth stalled, just kept improving the product.

2014

• January — Launch ConvertKit Academy to better train customers and use a launch model to bring in new accounts.

• April — Some success with that, but not on the level needed. Hiten Shah tells me to either focus on ConvertKit full-time or shut down the product and move on to something else. I ignore his advice.

• May — doing something else.

• June — I realize that ConvertKit Academy brought in only beginner customers who are likely to churn. So I stop promoting it and growth stalls again.

• September — doing something else.

• October — I take Hiten’s advice seriously. But instead of shutting down I decide to focus on it full-time and stop working on books and courses (and this blog). I choose “Email marketing for Authors” as a niche and start direct sales.

• November — MRR hits $2,100 and I push ahead with sales efforts.

• December — MRR reaches $3,237 which I find encouraging. I invest $50,000 and hire David Wheeler as our new lead developer.

2015

• January — Direct sales start to pay off as we land larger accounts. MRR reaches $3,885. I start to realize that authors are not a good market.

• February — More direct sales, more growth.

• March — After a lot of sales conversations ditch every mention of authors from the site and focus on “Email marketing for professional bloggers”. I start cashing out of some investments to have money for my personal expenses.

• April — Leo Babauta from Zen Habits switches to ConvertKit which is a major credibility boost in sales conversations.

• May — Growth is strong, but we aren’t growing fast enough so that our revenue ($8,500) matches our expenses ($13,000/month) before we run out of the $50,000 I invested. I look into funding options, but ultimately decide to temporarily lay off team members to avoid running out of money.

• June — Start trying webinars (with some success). Reach $10,000 in MRR. Release tags which rounds out our marketing automation offering, didn’t workout.

• July — Land some big new clients (including Pat Flynn) and hit a massive 48% revenue increase. We bring everyone back to full-time.

• August — 25% growth brings MRR to $18,296.

• September — 32% growth brings us to $24,699. Two days later we break $25,000/month.

• October — Just halfway through October we break $30,000/month showing 40% growth. Not including another 100 customers and $13,000 from a single webinar (that we counted as one-time income).

Analyzing ConvertKit's journey from 2013 to 2015 reveals several critical inflection points that transformed the company from a struggling startup to a rapidly growing SaaS business:

2013 was a frustrating year, with revenue stuck at $1,337 MRR even after 18 months post-launch. Most founders don't survive this valley of despair. Faced with the choice to shut down or go all-in, Nathan chose the latter.

The Focus Breakthrough (Late 2014) 

The most pivotal moment came in October 2014 when Nathan chose to focus full-time on ConvertKit instead of shutting it down. This decision, combined with targeting a specific niche (authors initially), immediately accelerated growth from stagnant $2,000 MRR to $3,237 by December.

The Niche Pivot (Early 2015) 

The switch from "email marketing for authors" to "professional bloggers" in March 2015 proved transformational. Authors had limited growth potential and budget constraints, while professional bloggers represented a more scalable market with higher lifetime value.

The Credibility Cascade (Mid-2015)

The real breakthrough came in 2015 with hypergrowth: from $3,000 MRR to $30,000 MRR, achieving 10x growth in just 10 months. High-profile customer acquisitions like Pat Flynn in July generated social proof that accelerated sales conversations and enabled 32-48% monthly growth rates.

It turns out his previous part-time commitment had proven to be wasted energy. After going all-in and pushing aside self-doubt, things finally turned around.

As the numbers began climbing, Nathan found encouragement. Though the $50,000 investment seemed daunting, but it proved worthwhile—this is what you do when you see potential in a project, even when it's still bleeding, that requires courage and vision.

Starting making profits in 2016

The real profit number showed below. A lot of founders build their startup and wishing for profits the next month. But ConvertKit didn’t make positive profits until 3 years later when they make over $10K MRRs, the cost will be much more than you expected. All those thinking about making profits at $3000 MRR won’t turn it into a meaningful business easily. MRR is just a start, not the end.

The Growth Timeline of ConvertKit

• JAN 2013 — Started on the idea for ConvertKit

• JUN 2013 — Reached $2,000 a month in recurring revenue (MRR).

• SEP 2014 — Revenue declines to $1,330 per month.

• OCT 2014 — Make the decision to double down on ConvertKit. Focus full-time, hire a team, and invest $50,000.

• JAN 2015 — $3,000 MRR

• JUN 2015 — $10,000 MRR

• OCT 2015 — $25,000 MRR

• DEC 2015 — $97,000 MRR

• FEB 2016 — Growing quickly, but just barely profitable with only $30,000 in the bank. Make the decision to get profitable as quickly as possible.

• 2017 — 597,000 MRR($7M ARR), with a distributed team of 25 employees, all around the world.

Nathan's journey hit me hard because it's so damn relatable. We've all been there—staring at declining numbers, friends telling us to "be realistic," that voice in our head whispering "maybe it's time to quit." When ConvertKit dropped to $1,330 MRR after 18 months, I bet Nathan had those 3 AM moments where he questioned everything.

But here's what gets me: instead of walking away like most sane people would, he doubled down. So he did what felt impossible—bet his last $50K, started cold-emailing strangers one by one, and basically said "screw it, I'm going all in."

It wasn't some overnight miracle. It was just a guy who decided to keep showing up, keep iterating, keep trying until something clicked. Makes you wonder how many potential success stories we've killed simply because we gave up one day too early.

Thank you so much for reading, If you click the subscribe button. I will try my best to bring the best stories of small startup with less than 15 people generating over $1M ARR to you. See you next week.

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Resource

1. https://nathanbarry.com/ 

2. https://www.indiehackers.com/post/the-story-of-convertkit-from-0-to-597-000-in-monthly-revenue-YuYm5Me8di4KbnVkESy8

3. https://www.indiehackers.com/podcast/206-nathan-barry

4. https://nathanbarry.com/5k

5. https://nathanbarry.com/30k/

6. https://nathanbarry.com/profit/