Nathan Barry: The Ladders of Wealth, How to Build a $40M Creator Business from Scratch | Entrepreneurship | E363

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24:16Plus marketing is built in so you can create email and social campaigns easily. And as you grow, Shopify can scale right along with your business. In 2026, stop waiting and start selling with Shopify. Sign up for your$1 per month trial and start selling today at shopify.com slash profiting. Go to shopify.com slash profiting. That's shopify.com slash profiting. Yeah, fam, hear your first. This new year with Shopify by your side. If you were just starting out, where did you build the email list to start with when you had your books? Yeah, so I built it from a lot of other blogs. I wrote lots of guest posts on other blogs.

24:54different design and iPhone app development communities. You don't realize at the time, Twitter was going strong. Instagram was only two years old at this time, maybe three 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 an automated sequence that gets you to buy the book afterwards.

25:34And so we're 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 going to build this up. So that became the next 12 years of my life. And then last year, we rebranded from ConvertKit to Kit. 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.

26:16Creator 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. 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.

26:53Probably the best leverage you can 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. Actually, I guess the third thing you get is relationships. you end up meeting all these people who also have leverage through their audience that trust 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.

27:33And 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. Yeah, you talk about the creator flywheel. I'd love for you to break down your philosophy around the creator flywheel and how that's different from traditional marketing funnels.

28:08Yeah, oh man, there's so much. I could talk about flywheels forever. I hear it. maybe first in flywheels. I think it's one of those words that a lot of people use and 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 flywheel. And so we were installing this well at this orphanage in Masaru, which is the capital city of Lisutu. And electricity was inconsistent. They would have these rolling blackouts. So we're like, oh, we can't put a pump on this that's going to require electricity because otherwise the 200 kids in this orphanage are not going to have water whenever the power's out.

28:49So then you're like, all right, we need 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 going to work. What exists out there that can take energy that you put in and compound that, not require electricity in 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.

29:25And so we put this flywheel on there. And at first, when we started pumping, 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 this flywheel on the well. At some point, I'm spinning it with one finger. I first had to lean in really hard to start.

29:59I'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 your newsletter goes out Tuesday at 10 a.m., probably Monday night at 9 p.m., 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 through force of will, you get something out.

30:43But 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 Holla. 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?

31:15Hit 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 gonna go out.

31:51So 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 I'll come around and 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. You get to the point that it becomes really, really easy to do. So lastly on the flywheels there is there's three laws to a flywheel.

32:27The 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.

33:01And so that's where each sentence 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. 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.

33:35But 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? Yeah, well, let's take YouTube as an example. We always pursue YouTube subscribers.

34:12That'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 1 ,000 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.

34:49Well, 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 five-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 gonna 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 gonna publish my next video, But now I'm going to email the 1 ,000 people that signed up and say, hey, go check out this video.

35:28They'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. So if you imagine, you know, this flywheel goes around, every step moves super smoothly into the next.

35:58It 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.

36:36You 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. 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 interest-based algorithms. The way that I think about email is that it's sort of like old school social media.

37:11So 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 chronological 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 100 ,000 subscribers, 100 ,000 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.

37:53Whereas email is just old algorithms. So it's like a social media platform that you basically control and there's no algorithm to work through. You're exactly right. and we can complain about the new social media algorithms and be like, oh, it's not fair that I worked so hard for these 10 ,000 YouTube subscribers and only 10 % of them are gonna 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.

38:38And 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 going to reach the same number of people with our content that doesn't go viral or spread. And that's okay, because that's where 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 this amazing foundation of our email list.

39:14And 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. 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. 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?

39:52Why 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.

40:30But 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 one to the top of ladder four, 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 gonna 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.

41:07This 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 gonna do. You know, I have the outside accountability. If I don't show up on time, I'm gonna get fired. You do that three times in a row and they're gonna 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.

41:44This is you trading, working with someone else for being the owner. And at the base of that, maybe you're doing hourly work for a client. We've got to learn some new skills now because no one's making you show up on time. No one's making you do the work. Is this you solo right now in this second rung? You solo providing services like freelance services? Yes, exactly. Okay. And then if we move up, we've got to 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 you this website for$50 an hour to I'll build you this website for$1 ,000.

42:20All 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 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.

42:58So that might be like, hey, I do web design audits for$1 ,000. 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 gonna talk over Zoom or we're gonna go out to coffee and I'm selling one-to-one. But if I'm doing a productized service, I need to be able to sell it on a website. And I need you to buy without talking to me. Whether it's a$100 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.

43:37And 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$1 ,000 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 e-book, right?

44:14It's fairly easy to make an e-book 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.

44:54Or for me, when I was selling iPhone apps, I had to make the product. Software was hard. But 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. Creating a network is like the top.

45:26Yeah, 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.

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50:06Disclaimer, results will vary. Not all bills or subscriptions are eligible. Savings not guaranteed. Paid membership with connected payment account required. See Experian.com for details. So succinctly, what are the four stages of that ladder? 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.

50:48When I switched ladders from running my services business to productized services, my income went down quite a bit. Even moving between rungs of 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 jumping all the way ahead and selling digital products.

51:24You 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 two, but now you gotta learn it as you've jumped all the way to the bottom of ladder four. 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.

51:54You 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 trying new things and they cheer us on and they support us that and then make introductions. So when you're saying, you know what, I'm going to start a podcast network, which is an incredibly hard thing to do. Is that ladder four? I was going to ask you, is that four or three? You can make an argument for either case because you are productizing and standardizing some of these services. You're selling advertisements, you know, helping to book demand and all that.

52:31But you're starting to get these network effects. Yeah. Maybe in between 3.5. Yes. You know, as you really have 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. You never had a podcast. You never had sponsorships. You never ran an agency. 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.

53:07That'd be way harder. 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. 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. So they're selling products, but it feels a lot like maybe a productized service because it's handmade.

53:51And so if you think about, if we want to introduce more leverage into this, we have two aspects of it that we can do it. First, we need to get more attention. We're selling 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 it's being sold online without you having a conversation.

54:30You're not having to call up and be like, hey, Holla, I'd love for you to buy. You're not doing one-to-one sales. You've got this mass sales. So it is a product-ed 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. 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.

55:09Yeah, 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, can you include an email to your email list at the same time? I mean, everything is bespoke and custom. You could productize 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 product-based service.

55:42What would they do to scale that? 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. And is courses a product to you? Oh yeah, absolutely. And 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 four.

56:18And then they're going to earn so much more. Let's say that go back to COVID or even 2022. But with 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. 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.

56:58So talk to us about how teaching really builds trust. Teaching everything you 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 learned 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?

57:33They're going to find out, you dropped out of college when you were 17. 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 because they teach. And you can actually look throughout history at key historical figures that we know now and start to break 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.

58:10He 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 name. 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 that, there were a bunch of writers that went out.

58:47But 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. No, you say, okay, I'm gonna teach everything that I know. If I learn something last week, I'm gonna teach it. I'm gonna 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.

59:22I followed their tutorials step by step and I could not figure it out. And then I came across the 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 it. 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, it'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.

59:51And 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 because I'm like, I'm not an expert.

1:00:26I'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. 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.

1:00:58I 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. 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.

1:01:32And 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.

1:02:06and 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 just have 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.

1:02:40I 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. 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?

1:03:11We made about$40 million last year. Incredible. And we're on track to make about$50 million this year. And how much was profit of that? Profit was about 7%. Okay. So a handful of millions. We invest very heavily. 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 with 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. And you have some huge creators.

1:03:47You have Tim Ferriss, who we mentioned earlier. Who are some of the big creators on Kit now? 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. We got comedians like Hassan 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. Yeah, your own app that you created.

1:04:24It 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. I 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 financials so transparent? I grew up in an environment where money is 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.

1:05:01My 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. Actually, 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 their 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.

1:05:34Like be very thoughtful and considerate. And so I had thought if I can get 45 to$50 ,000 a year in this job in 2009, that would be amazing. We're sitting at a 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 mouth full.

1:06:15And so in my head, I'm going$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, you know, like, was that too low of a number? And he's like, 50, or, you know, we could do$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 fight, I like implemented the feedback from the book, salary negotiation as a skill, basically. I moved up a little bit in the ladder, but really it came down to the fact that I had words timed by and that really good luck and they're making me an extra ten thousand dollars 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.

1:07:23Why? That's a lot of money. $100 million is my number for Yap Media. I would love to be valued at$100 million company and exit. That's really big. So why did you turn it down? You know, I always said, I'm not going to 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?

1:08:03And really I thought about, okay, what would I do with$200 million? Because I haven't raised any outside capital. I still own 85 % of the business. I was going to ask you, how much do you own? Yeah, it's a lot. And so in that, I really realized that I was going to go back and do the exact same thing. I wanted to build a platform serving creators. And I like to make things. Even 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 there's people who are like, oh, I want to be a solopreneur.

1:08:42And 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 was 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.

1:09:14And 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. And you're making great money. 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, OK, yeah, that makes sense. I would not be surprised at all if 10 years from now I'm still running the exact same company.

1:09:50So talk to me about you have 85 percent of your equity. So just curious about how selfishly how you've approached giving away equity. Is it to your team or is it for investments? Have you ever given away equity to your team? 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 in the market, after them equity, invests over four years. And then we do refresher grants. You know, I've got people that have been on my team for eight years or more.

1:10:24And 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 I 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.

1:11:08And 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. But 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.

1:11:38Do you consider any of your employees to be your business partners or no? No, I've never had a co-founder at that level. Now I have an executive team. It'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. 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?

1:12:16I learned the power of an audience and then audience was gonna 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's never been Skype. Yeah. And so she did, and I wrote a post about that. Or I'd be able to call other people up for advice.

1:12:48The 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 you 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.

1:13:25And a fun little side effect is 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. You must be really proud of the little baby steps that you took in the beginning. Yes, 100%. 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? Yeah, so I think that technology has always innovated everything that we're doing.

1:14:02The 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?

1:14:39And 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 just 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. It's just noise. And so what do you do to stand out as a creator in a world where we can just generate whole creators?

1:15:16So I think you have to tell more personal stories. that 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 replet 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.

1:15:56And they have 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, Chad G.P.T., what's the summary of this book?

1:16:35Okay, 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 gonna be in 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. Wow, that was really eye-opening. Like I never thought about it that way. So I'm really glad that you brought it up.

1:17:11for everybody tuning in who's more in their like 30s and 40s, I feel like we're in a better situation because 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. Actually read the books. Yeah, actually read the books. Nathan, I always close my show with two questions I ask all my guess. The first one is what is one actionable thing our young and profiters can do today to become more profitable tomorrow? 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.

1:17:55Even 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. And what would you say your secret to profiting in life is? I look for leverage wherever I can. I would read a book called The Almanac of Naval Ravikant. It sounds like an intimidating book. Almanac of what? Ravikant? The Almanac of Naval Ravikant. Naval is a famous investor. I think he's a billionaire.

1:18:30Very, 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 just all of 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 in your life and business. And if you do that, you'll just have an easier time in everything that you do. I love that. I'm going to get that book and I'm actually going to read it. Do it. Nathan, thank you so much for your time.

1:19:05Where can everybody learn more about you, Kit, and everything that you do? I have a podcast called The Nathan Berry Show. It's had amazing guests like Mark Manson and yours truly. Thanks for coming on. Yeah, it's fun. So check that out if you love podcasts and then go to kit.com if you want to build a newsletter and have email powering your creator business. 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. Yeah, thank you.

1:19:38Yep, 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.

1:20:15It's a roadmap for building a business and a life on your own terms. In 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 spinning with purpose. We also got deep into Nathan's ladders of wealth creation, a framework every entrepreneur needs to understand.

1:20:50If 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, 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.

1:21:24That'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 Nathan 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 already have what it takes to create leverage.

1:22:02You 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 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.

1:22:39That small action makes a huge difference to us at Young and Profiting Podcast. If you wanna check out all of our videos, you can head over to YouTube if you wanna 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.