Kit's $40M ARR founder story

Hey, it's Guy & Farzan,

When I turned 50, my wife asked friends to chip in for a surfboard instead of gifts. Yesterday I bought the longboard off Marketplace.

Today I surfed it at Manly. Sun out, offshore wind, felt like summer. Felt like a kid again. Enjoy this week's edition.

Reading time: 8.5 mins

In the mail today. 3 founder stories, 2 founder notes

 Founder story 1 

Nathan Barry & ConvertKit: From Side Project to $40M ARR without VC Money

From homeschooled Idaho kid to SaaS success: See how Nathan Barry built a $40M creator-first email platform that rejected a $200M acquisition to stay independent.

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- Grew up homeschooled in Idaho, far from Silicon Valley's startup scene
- Dropped out of college at 17 after landing a $10,000 web design client
- Self-published three books on app design and built a 40,000-person email list
- Launched ConvertKit in 2013 as a side project to solve his own creator needs
- Went full-time in 2014 after investing $50,000 of his own money
- Rejected a $200M acquisition offer in 2021 to maintain independence

The Evolution of Vision
- 2013: "Why isn't there an email tool designed specifically for creators?"
- 2015: "Let's build the simplest, most creator-friendly email platform"
- 2018: "We're about selfless service" (attempted rebrand to Seva, later reversed)
- 2022: "Let's help creators monetize through our Sponsorship Network"
- 2024: "Our mission is helping a million creators make $1,000/month"

Overcoming Obstacles
- Missed initial goal: only $2,000/month revenue after 6 months (target was $5,000)
- Had to choose between shutting down or going all-in with personal savings
- Manually migrated customers from Mailchimp one by one to build early loyalty
- Failed rebrand to "Seva" in 2018 caused confusion and backlash
- Lost key executives after rejecting the $200M acquisition offer
- Balanced product focus against pressure to expand into enterprise features

Today's Impact
- $40M+ in annual recurring revenue
- $200M company valuation
- 45,000+ paying customers
- 100% net dollar retention rate
- 80+ fully remote team members
- $8M+ in profits shared with team annually
- $520,000+ in creator sponsorship deals booked through platform

Growth Strategies That Worked
- Manual Onboarding: Personally migrated users from competitors, creating evangelists
- Content Marketing: Published transparent updates on revenue, growth, and challenges
- Creator Advocacy: Partnered with influencers like Pat Flynn for organic promotion
- Focused Product: Stayed laser-focused on creator needs vs. chasing enterprise features
- Profit Sharing: Distributed millions to employees, building loyalty and culture
- Ecosystem Building: Added landing pages, automations, and ecommerce tools for creators
- Public Building: Launched and grew in public, sharing lessons and accountability

Key Milestones
- 2013: Launched with goal of $5K/month in 6 months
- 2014: Hit $2K/month, invested $50K personal funds to go full-time
- 2015: Crossed $10K/month milestone
- 2016: Reached $100K/month with team of 20 people
- 2018: Attempted rebrand to Seva, quickly reversed after community feedback
- 2021: Rejected $200M acquisition offer
- 2022: Launched Sponsorship Network for creator monetization
- 2024: Rebranded from ConvertKit to "Kit"

The Philosophy

"I don't want to build a billion-dollar company. I want to build a company that helps a million creators make $1,000 a month."

"At that stage, scale wasn't the goal. Survival was. I did things that don't scale because personal touch creates evangelists who stick around."

"We're not trying to be everything to everyone. Every decision is guided by one question: Will this help creators earn a living?"

Founder story 2

How Josef & Timo built setter AI to $10K MRR without writing code first

Josef and Timo met in a co-working space and built Setter AI, an AI appointment setter that now does $10K MRR. But here's what's remarkable: they made $500 before writing a single line of code.

Their validation playbook:
→ Created a fake landing page with a demo video (made with 11 Labs)
→ Used a warm domain for instant Google indexing
→ Targeted low-competition SEO keywords ("cold call automation")
→ Got indexed within 24 hours via Google Search Console
→ Closed deals with a "refundable deposit framework" - $500 deposits for early access

The validation signal?
A billion-dollar company booked a call from their fake landing page.

Their growth strategy:
- Pure inbound SEO (now rank #1 for their main keyword)
- Built free tools (sales script generator)
- Wrote comparison articles (HubSpot alternatives)
- Long-form YouTube content (most customers watch videos before buying)

Current stats:
- $10K MRR with just 38 paying customers
- 90%+ margins (no ads)
- 2,000 total signups
- Pricing: $50-$5,000/month (went high-ticket intentionally)

Key insight: 
"Nothing validates your idea more than someone swiping their credit card." Don't build first - get paid to validate, then build.

Founder story 3

From beach problem to 7-figure solution: See how surfer mum Suzanne built an outdoor essential with 40K subscribers.

The Journey
- Grew up on the Gold Coast with entrepreneurial parents who owned their own business.
- Originally aspired to be a Marine Biologist but pursued Health Science instead.
- Spent years in the Health and Pharmaceutical Industry, working as a sales rep for 3 years and in management for 10 years.
- Left corporate career after having her second son to focus on family.
- Took up surfing in 2005 and became deeply passionate about outdoor activities with her two boys.

The Evolution of Vision
- 2005: Took up surfing after having her first son
- Pre-2017: Constantly struggled with sand, dirt, and mess from outdoor activities
- 2017: Created DIY prototype that attracted attention wherever she used it
- August 2017: Launched muk mat with 500 units that sold out immediately
- 2023: Built business to 7 figures with 40K newsletter subscribers and 20K monthly website visitors

Overcoming Obstacles
- Balanced family life with growing business demands.
- Resisted pressure to manufacture overseas to maintain quality and values.
- Navigated the challenge of turning a relaxing post-corporate life into running a full-time business.
- Learned to manage the constant demands of entrepreneurship while staying true to her introverted nature.
- Had to learn when to outsource and when to handle tasks personally.

Today's Impact
- 7 figures in annual revenue
- 40,000 newsletter subscribers
- 11,000 Instagram followers
- 20,000 monthly website visitors
- 6 employees
- Bootstrapped business

Growth Strategies That Worked
- Word of Mouth: Focused on getting mats into hands of key communicators and ambassadors in the caravan and camping community
- Media Coverage: Featured on TODAY SHOW, Weekend Australian, SUNRISE, and What's Up Downunder
- Incentive Programs: Used Share and Save discount to encourage customers to share their experiences
- Field Testing: Extensive prototype testing with real customers in real-world settings
- Local Manufacturing: Kept production on Gold Coast for quality control and exceptional customer service

Key Milestones
- Started with 500 muk mats in August 2017.
- Sold out initial inventory almost immediately.
- Appeared on TODAY SHOW as one of the "hottest new camping essentials" shortly after launch.
- Expanded product range based on customer feedback.
- Built email list to 40K subscribers.
- Scaled to 7-figure revenue while maintaining work-life balance.

The Philosophy

"I don't have your classic extroverted entrepreneur story. In fact, I'm the last person most of my friends would expect to be an entrepreneur. I'm a quiet, methodical and practical person. I simply stumbled across a way to really improve the quality of life for fellow surfers like me."

"My advice for entrepreneurs is to prioritise your health. It's easy to let that slide, but for me, it is my superpower. An hour outside to exercise will give you the energy and the mental clarity to be so much more productive than trying to push through."

Core Values:
Look after your future self. Treat others how you want to be treated. Choose honest and kind. Embrace the outdoors. Stay connected with family, friends, community and the environment. Find balance between work and play. Do something that excites you, every day. Be proud of what you do and how you do it.

 Founder note from Ben Bradford  

Last month I grabbed coffee with a guy who runs a small business here in town. 20 employees, been around for 15 years, profitable every single year. When I asked about his "growth strategy," he laughed. "My strategy is going home for dinner with my family and making sure my team does the same."

My news and LinkedIn feed is full of the over-glorified unicorn start-ups raising their next billion dollar Series XYZ and demanding 80-hour work weeks. What I need more of is the entrepreneurs who have a successful business, a well-balanced life, happy employees and a small niche in this world that affords them a comfortable living.

37signals used to highlight these people and their businesses in The Rework Podcast and I loved it. They weren't fancy businesses or fancy business people. Just hardworking individuals with a good idea and the wherewithal to turn it into a great business.

It's easy to get caught up in hype cycles, but small firms make up 99% of all businesses and employ nearly half of our workforce. While we're all concerned about AI's impact on the future of work, it's worth focusing on the people who make a go of businesses in a whole variety of sectors.

If you're listening to or watching a show that's doing this, or if you're following people here on LinkedIn who showcase this kind of content, please share!

 A founder note we loved

See you next week.

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Cheers

Guy + Farzan
Founderoo