WORK LESS, EARN MORE PODCAST EPISODE #354
You'd think a bigger email list always means more money.
More subscribers, more sales. Simple math, right?
Not quite.
I recently sat down with Nathan Barry, the founder and CEO of Kit, on the Work Less, Earn More podcast. Kit has over 100,000 customers using the product every month. So Nathan gets a rare look behind the scenes at what's actually working.
And one of the first things he told me surprised a lot of people.
The connection between list size and revenue is much weaker than you'd expect.
Nathan pointed to Dustin Riechmann as an example. Dustin has talked publicly about having fewer than 5,000 email subscribers. And he earns over a million dollars a year.
So what makes one list so much more profitable than another? And how do you build one like that?
Here's what Nathan shared.
1. Understand What Really Drives Revenue per Subscriber
According to Nathan, two things throw off the size-equals-money assumption more than anything else.
The first is your niche. Creators in business, coaching and marketing tend to earn quite a bit more per subscriber. Creators in food and wellness tend to earn less per subscriber, but their audiences are usually much bigger.
The second is your price point. Creators selling products in the $10 to $200 range usually earn less per subscriber. Dustin, on the other hand, sells a $10,000 coaching accelerator.
Nathan said the link between higher prices and higher revenue per subscriber is one Kit can be very confident in.
Part of the reason? Higher-priced products usually deliver more direct value.
Nathan used a classic marketing idea here. Sell painkillers, not vitamins. A vitamin is nice to have. A painkiller solves a problem someone has to deal with right now. People spend more on the things that help them drive revenue or cut costs.
2. Don't Believe the Teach-Money-to-Make-Money Myth
You've probably heard that the only way to make money online is to teach people how to make money online.
Nathan doesn't buy it.
He explained that it's an echo chamber. The creators we hear about most are the ones talking about online business. So it looks like that's the only path.
But the data says otherwise.
The number of people who care deeply about conversion rates and marketing is pretty small. The number of people who want to eat a healthy dinner? Massive.
A food blogger with 250,000 email subscribers is fairly common. A creator in the online business space with that many subscribers would be one of the top handful of people in the whole niche.
So even though those other niches earn less per subscriber, the much bigger audiences make up for it. According to Nathan, the vast majority of creators making money online are not teaching people how to do it. They're just quieter about it.
The takeaway? Before you compare your results to someone else's, make sure you're playing the same game.
3. Sell Your Own Products
Within any niche, Nathan sees a wide range in how creators make money.
Some lean on advertising, sponsorships and affiliate deals. Others sell their own digital products, like courses, coaching, memberships and ebooks.
The second group typically earns much more.
You don't have to give up sponsorships. They can be a nice baseline. But selling your own products to your own audience is where the biggest money is.
I always say one of the hardest parts of making money online is simply making the sale. So when you make one, you want it to be worth as much as possible. If you're selling someone else's product, you only keep a small slice. If it's yours, you can keep all of it.
Nathan added another benefit I love. When you sell your own products, you get data. You learn who your audience is and what they're willing to buy. And that often leads to a product ladder, where people who bought one thing go on to buy the next.
I see this in my own business. Most of our sales during a promotion come from people who've already bought something from us before.
4. Save Recurring Revenue for Later
Nathan is a huge fan of recurring revenue. In Kit's 13-year history, there have only been two months when revenue came in lower than the month before.
But he also gave beginners some surprising advice.
Don't start with recurring revenue.
Recurring products are much harder to sell, and there's a lot more to learn. Early on, a one-time product like an ebook, a course or a service is a great way to get your first win.
Then, as your skills grow, you can move into recurring products. Those are better businesses to own.
I tell my audience the same thing. Without recurring revenue, you start every month at zero. With it, you have a baseline, and everything else you sell is gravy on top.
5. Treat Making Money as a Skill
This was one of my favorite parts of our conversation.
Nathan believes making money is a skill. Like playing the piano.
You wouldn't expect to sit down at a piano for the first time and play something amazing. But a lot of us expect our first business to just work.
In business, the skills are things like copywriting, setting up a checkout page and writing hooks. And you can learn every one of them.
Nathan suggested mapping it out. Pick a goal, like earning $75,000 a year from your online business within 12 months. Then list the skills you'll need to get there. Getting people on camera. Writing hooks. Driving people to your email list. Writing emails. Setting up products and automations.
You might end up with 25 skills. Decide how much time each one needs, and you've got your own roadmap.
Nathan called it a "how to get lucky" playbook.
He also shared the idea of luck surface area. Hitting a tiny target from far away is hard. Hitting the broad side of a barn is easy. A bigger network, more followers and better selling skills all make the target bigger.
This is a big part of why I'm such a believer in building your audience. Every piece of content you create is practice. You learn how people respond, and you get better and better. By the time you've built an audience, you've probably built the skills to launch a product successfully too.
6. Start With the Product, Then Build the Audience
So how do you actually build a list that makes money?
Nathan's answer is to start with the product.
When he was starting out, he was writing a book about how to design iPhone apps. So he set out to build an audience of people who wanted exactly that.
Starting with the product makes your audience much more targeted. And a targeted audience earns more per subscriber.
Nathan's mom took the same approach. She decided to teach women over 50 how to reclaim their lives through fitness. That's specific. And because it was specific, she could easily think of people who fit.
7. Get Your First Subscribers Through Warm Outreach
To get his first 10 subscribers, Nathan simply reached out to friends, coworkers and family who might be interested.
He told them he was writing a book about designing iPhone apps and starting a newsletter with weekly tips. Then he asked if he could add them.
Most people said yes.
That kind of outreach can get you to 10, 20 or 30 subscribers. Nathan knows people with broader topics who have reached 250 or 300 that way. His mom invited around 50 people when she started.
I love this approach. Asking someone to buy your product from day one can feel awkward. Asking if they'd like to get your newsletter is a much easier yes.
8. Ask Your Subscribers Two Questions
Once you have around 25 subscribers, Nathan recommends emailing all of them with two questions.
What's your biggest pain point or frustration related to this topic?
Where do you go online right now to learn about it?
The first question solves writer's block. Instead of guessing, you know exactly what people want to learn. You can write a newsletter to one real person who asked a real question.
The second question tells you where your audience already hangs out. Join those communities. Offer to guest post. Become the most helpful person in the Facebook group.
Nathan finds this works well for growing from those first 25 people to a few hundred.
9. Don't Chase Views at the Expense of Buyers
Eventually, you'll need a way to turn social media followers into email subscribers. Without one, Nathan says most lists hit a plateau somewhere around 5,000 or 10,000 subscribers.
But there's a trap here.
A lot of creators throw content at the wall to see what sticks. Then one random post takes off. So they make more like it. And before long, their whole audience is built around something they don't even care about.
The views are great. The sales never come.
Nathan's advice is to keep experimenting, but step back every so often and ask yourself if this is leading where you want to go. Starting with a product gives you a guiding light, so you're always working toward the people who'll come back to it.
And if you do end up somewhere you don't want to be, it's okay to walk away. Nathan shared the story of a friend who sold his successful education business to his team and started a pool cleaning and maintenance company. He didn't start from scratch. He took all his skills with him.
I've started over more than once myself. I've never regretted it.
The Bottom Line
A list that makes money isn't just a big list. It's a targeted one, built around a product that solves a real problem.
Start with the product. Get your first subscribers through warm outreach. Ask them what they need. And keep building your skills along the way.
If you want to go deeper on Nathan's ideas about making money as a skill, his book The Ladders of Wealth comes out March 2. You can pre-order it at laddersofwealth.com.
Want early access to some of my newest trainings, workshops, and business resources before they’re released publicly?
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Show notes + links:
LISTEN TO THE FULL EPISODE TO HEAR:
Why audience size and revenue are less connected than you'd expect
How your niche and price point shape what each subscriber is worth
Why your own products earn more than sponsorships and affiliate deals
When to start offering recurring revenue products (and when not to)
How to get your first subscribers and find out exactly what they want
The algorithm trap that builds an audience that never buys
About Nathan Barry:
Pre-order The Ladders of Wealth: https://laddersofwealth.com
Kit: https://partners.convertkit.com/ezf23916u2j7
Work with Gillian Perkins:
Startup Society: https://startupsociety.com
$100K Mastermind: https://gillianperkins.com/100k-mastermind
FREE Resources to Grow Your Online Business:
Small Business 101 (free course): https://gillianperkins.com/free-training-small-business-101/
$100K Method (free audio course): https://www.gillianperkins.com/100k-method-signup
Early Access (Why Your Audience Isn't Growing): https://www.gillianperkins.com/early-access
Connect with Gillian:
Learn more about Gillian: https://gillianperkins.com
Instagram: @GillianZPerkins
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