I thought 2021 would be easier than 2020: the pandemic would wind down because of vaccines and better treatments, we’d find a new groove with work, and family life would get easier as the kids got older.
In reality I found 2021 to be more challenging on many fronts.
Let’s dive in.
At ConvertKit we had a challenging year. 2020 brought pretty fast growth, mainly because of everyone moving online during COVID, then 2021 was much more flat as people spent most of the summer offline and away from their businesses. Like many creator economy companies, we didn’t see the same level of growth continue. We were still able to grow annual recurring revenue from $25 million to $29 million.
We were able to substantially grow new users by more than 250,000 and GMV by an average of 10% month over month.
The hardest changes came from our executive team departing. At the end of the summer Barrett, my long-time friend and COO, moved on after five years at ConvertKit. We worked side-by-side to build ConvertKit into the platform it is today and I still miss him, but understand that everything has a season.
We later lost Sarah, our VP of Engineering, as well as a few other team members. All the departures were on really good terms, but they are still hard, especially as a team that historically sees almost no departures.
Our first acquisition
We kicked off the year with an exciting move to acquire FanBridge, the leading email marketing platform for musicians. This was covered by Billboard, brought over thousands of new artists to the platform, and accelerated our growth in the music industry.
Whatever you expect in an acquisition, know that it will be more difficult. I’d heard that before, but it doesn’t sink in until you live through it. From lawyers and contracts to technical issues we had our share of challenges, but the upside was definitely worth it.
It’s been such a good move for both the FanBridge artists and ConvertKit as a company. Because we grandfathered the existing pricing for a period of time, we won’t see a revenue bump until later this year.
An offer we could refuse
Spotify reached out about acquiring ConvertKit this year. Historically we’ve had interest from private equity firms, but this was the first time a name-brand company reached out with strong interest. I felt like I owed it to myself and the years I’ve put into ConvertKit, to actually consider the offer.
After quite a bit of journaling I decided I didn’t want to sell and recommitted to the long-term vision. Our mission to serve creators is more important to me than the return from an acquisition, even to a company as cool as Spotify.
Unfortunately that frustrated some team members who wanted liquidity for their shares. As it happened, a few weeks later I got a really interesting email from Dharmesh Shah (Co-founder and CTO of Hubspot), who had heard Sam Parr and I talking on my podcast about the problem of liquidity for team members in privately held companies. He offered to buy $1M worth of shares from any team member who wanted to sell in a secondary transaction.
This was the perfect solution. We could stay focused on long-term goals, friends of ConvertKit could buy shares, and our team members could get some liquidity for house down payments, helping family with medical bills, and more.
We worked with AngelList to create a special purpose vehicle (SPV) that would take money from anyone who wanted to buy shares and combine it into a single entity on our cap table. That made the process so easy and allowed us to take checks ranging from $2.5 million all the way down $10,000—so long as each person was an accredited investor.
This transaction valued ConvertKit at $200M and all together about 3.2% of the company changed hands. I think we’ve found the perfect balance for providing great financial outcomes for our team members without the downsides of a publicly traded company or traditional investment.
Retiring our parents
Hilary and I live well below our income level so at first we weren’t going to sell shares, but then we thought about our parents. They were all close to retirement, but still had money concerns and planned to work for at least a few more years. When we did the math on the valuation, our equity, and what would make a big difference in their lives we decided to sell shares and give the money to our three sets of parents.
Telling each of them was one of the highlights of my life! As they get older I’m excited that they all have complete freedom with their time. At some point in the future I’ll write an article about the whole process.
COVID & canceled retreats
The extended pandemic took a huge toll on our team. From school closures, a lack of access to child care, the exhaustion of making safety decisions, and then actual illness we all felt very burned out from COVID.
We also ended up with two virtual retreats this year, after trying to plan an August retreat and having the Delta wave make that impossible. Our team has done a great job of making virtual retreats really special but there is nothing like the real deal, in-person bonding that happens at a retreat. So we were sad to cancel them but felt it was the right thing to do.
Features we built
2021 was a huge year for feature development at ConvertKit. Here’s a small sample of what we released:
- New integrations and APIs — We launched integrations with Patreon, Pico, Typeform, Castos, and more. Since ConvertKit is the hub of your creator business it’s important we integrate with all the tools you use. We also launched a beta of our new broadcasts API.
- Email editor — Our email editor has been in the works for two years. Rather than using something generic like most email companies we decided to build our own that starts with a seamless writing experience and then enables you to layer in all kinds of rich media and design elements. Those include layout and design blocks, countdown timers, twitter and spotify embeds. We’re now the only mainstream email provider to allow video to play natively in emails. Last year was all about laying the foundation and early this spring we’ll bring it together with some big new releases.
- ConvertKit Commerce — Commerce had a big year with the addition of pricing plans, subscription time periods, pay what you want, tip jars, and more currencies. It’s exciting to see so many people using the product.
- Paid newsletters — We launched native support for paid newsletters. You can now run a paid newsletter on ConvertKit Commerce for just 3.5% fees instead of Substack’s 12.9%.
- Unsubscribe survey — This makes it easy to ask your subscribers why they are unsubscribing and learn from the data.
- Sequence improvements — We had a ton of releases for sequences: You can repeating subscribers in an email sequence (which is great for webinars or other advanced automations). Evergreen sequences allow you to hold subscribers in the sequence and add to it gradually. Default content in email templates means you can define a format and easily re-use it each week for your emails.
- Spam & abuse — Because our deliverability is so good we have a constant onslaught of attempts to gain access to ConvertKit accounts by bad actors. We released a lot of features powered by machine learning to prevent abuse and spam from evil actors on the internet. We also gave creators the ability to block subscribers who are behaving badly.
- New dashboard & navigation — To organize the app better and make it faster to reach pages that were hidden, we released a new navigation. It’s already boosted discovery of buried features. We also built out a dashboard that has your latest stats and links to content in the ConvertKit universe.
- Automation template library — Our automation template library gives 20+ automations for you to use as a starting point for launching an album, a paid newsletter, a referral program, and so much more.
All of these features are going a long way towards building ConvertKit into the best Creator Marketing Platform.
I have a couple side businesses that I try to keep to under 5 hours a week between all of them. They help provide contrast to my life and are another creative outlet.
I purchased two properties in 2021. The first is a fairly basic duplex in East Boise for $656,000. At the time it felt expensive (the market climbed like crazy), but it drove pretty incredible cash flow for the year (33% cash on cash!).
The second was a fancy new construction home near Boise State University. After hearing stories from a few friends I wanted to try owning a really fancy property that we could charge a higher nightly rate for. So we purchased this one for $890,000 (down from the $1.1 million they were originally asking). It went on Airbnb just in time for Thanksgiving and is already our best performing property in 2022.
The rest of the properties did well. I had forecast $390,000 in revenue and we ended up hitting $418,275. We differed from forecasts in two ways:
- It took us longer to get properties on Airbnb than I expected, meaning revenue was delayed.
- Our nightly rates came out higher than forecasted, increasing revenue.
Nearly all of that revenue was rolled into the next property purchase, furnishing, and remodel costs. So 2021 was all about increasing the size of the portfolio. I own all of these with incredible partners who do most of the work.
For 2022 we have just one property to renovate (purchased a couple weeks ago) and then we’ll be in a great spot with far more properties on airbnb than before. It will be a stretch, but I think we can pull off $750,000 in revenue across 16 units on 7 properties.
One of my favorite things of the year is a local newsletter about Boise, Idaho called From Boise. I was inspired by what Andrew Wilkinson had done with The Capital Daily in Victoria and wanted to do the same for my hometown.
Every Tuesday we send an in-depth profile about the life, history, and people of Boise, then every Thursday we send a roundup of the best things to do for the coming weekend.
I started collecting email subscribers in February, hired Marissa Lovell as our managing editor in March, and we launched in early April. Over the year we grew to 6,174 subscribers (now over 8,000).
New subscribers came from direct outreach, referrals, Facebook and Instagram ads, and then word of mouth from writing great content. Because I hired out almost everything (design, writing, editing, ads, etc) I spent very little time on the venture (maybe 40 hours over the whole year). But that also meant that it cost a lot (nearly $50,000) to get off the ground.
For next year I think we can scale further and get to profitability. Our goal is to reach 20,000 subscribers and be profitable through sponsorships and other products.
Marissa has been an incredible partner and in 2022 she’s officially coming on as a co-owner.
My blog & audience
I earned $26,680 from my blog in 2021, with the majority of it ($19k) coming from a new paid newsletter I launched over the summer. I’ve written a lot about how to earn a living as a creator, but very little about what to do once you’re earning more than you know what to do with.
Sparked by a desire to sell something through ConvertKit Commerce I launched a paid email newsletter for creators who are earning more than $200,000 per year from their ventures. Because I didn’t want to be on a treadmill of promising new content each week I decided to charge $100 one time, rather than a monthly subscription.
Then it’s set up as an email sequence that sends each issue, in order, every Friday morning. I promised 8 lessons on the sales page, but I’ve kept adding to it and it’s now at 12. I think paid email courses are a fantastic way to launch a product and ConvertKit makes it so damn easy.
This year I want to add 5-10 more lessons and drive $25,000 in sales, just as an incentive to make it more valuable. I expect to raise the price to $200 once I do that. If you’re interested you can buy it here.
The podcast was really fun this year. I met so many new people and heard from a lot more listeners who listen each week. It’s grown to about 1,000 downloads per episode. Daily Content Machine makes podcasting effortless. I just record each week and they do the editing, show notes, titles, and daily clips on all my social media channels.
My favorite part is how many new friends I’ve made. There’s nothing better than a podcast (okay, maybe a conference) for turning people you follow on the internet into friends.
My newsletter has also been a fun outlet for whatever I’m creating (along with the whole ConvertKit team). I sent an issue almost every week in 2021 and plan to continue it in 2022.
I decided this year that I don’t really want angel investing to be a part of my long-term financial plan. While I enjoy it, it’s too much of a distraction from ConvertKit.
So in 2021 I did one new angel investment (Simply Eloped) and otherwise focused on businesses where I already owned shares (buying more properties in my real estate partnership and buying the shares of a fellow Cerro Gordo investor who wanted to sell to reinvest in something else).
The kids are doing really well. Oliver has grown up so much. He’s 10 now and I can’t believe it. August is now 7 and has quite the personality. Both of them are old enough that we can do more adventures like backpacking trips, hikes, and more.
Josiah is ridiculously cute and the most polite kid ever. Seriously, he says please and thank you for everything and is generally really positive. We still have rough nights of sleep and are generally frazzled parents, but we feel really blessed to have 3 wonderful, healthy boys.
Hilary and I also had a good year. We had good conversations and I feel like our relationship is so much stronger and healthier than it was a few years ago.
Saying goodbye to my step-dad
At the end of the year my step-dad’s health really started to fail. After two emergency surgeries it became clear that even with all that intervention they were unlikely to save his life. On Christmas Eve he was moved to comfort care in the hospital. Under COVID rules we couldn’t visit when he was in the ICU, but on comfort care he was allowed two visitors at a time.
I’ll always remember the whiteboard in his hospital room that listed the date, his current doctor’s and nurses’ names and then under the “goals” line it simply said “be comfortable.”
We took the week between Christmas and New Years off as a company and I was able to spend a lot of that time in the hospital talking with my mom. We talked for hours about life, love, raising kids, and family. Some of these conversations were long overdue and I’m so grateful for them.
Ross, my step-dad, was not conscious for most of the time, but there was a day in there where he fully woke up. I was able to have a real conversation with him, thank him for loving my mom so much, and say goodbye.
After two weeks in the hospital he was able to go home on hospice care. On January 4th Ross passed away at home with a view of the mountains he loved so much.
Ross was a paraplegic, but he still loved to go fishing on his modified pontoon boat and spend as much time outdoors as possible. He had saved up and ordered a custom off road rig called “Not a Wheelchair.” With knobby tires and a 25+ mile range this was going to open up a whole new world for him to explore. He was looking forward to it so much.
Once he knew he wasn’t going to make it out of the hospital his only request was that my mom not return the rig or cancel the order, but instead donate it to a young paraplegic who would make good use of it. My mom reached out to the company and they told her about a 10 year old girl who had been paralyzed in a car crash a couple years earlier. She was saving up for the same rig.
For privacy reasons I can’t share the photos, but just imagine the most vibrant, active little girl who is about to have her whole world opened up thanks to Ross’ gift.
My favorite thing is that Ross was able to know who his special rig was going to and the impact it would have in her life. I’ve since bought another rig for them to donate to someone else in need. If you’d like to donate as well you can do that here, then send me the receipt and I’ll match it.
Compared to pre-pandemic times, I traveled very little in 2021. But we still got some fun trips with a few more of them being close to home:
- McCall with friends
- Sailing in the US Virgin Islands
- First backpacking trip with the kids
- Backpacking across the Sawtooths
- Camping at Redfish lake
- Europe: Barcelona & Marseille
- Austin (first conference in years!)
This year I lived out the dream to captain a sailboat with a week-long trip to the US Virgin Islands. The trip went really well and we remembered most everything from our sailing class a couple years ago. Sailing is my favorite vacation and I can’t wait for our next trip (coming up in just a few weeks!).
One of my highlights of the year was a 44 mile backpacking trip across the Sawtooth mountains. It’s an incredible mountain range that I’ve visited almost every year for camping and backpacking trips, but only ever to the front-side. The middle of the range is so remote that very few people go back there.
My friends Colby and Jared have always talked about taking a trip to hike the entire length of the range. This was the year it finally happened!
For those that know the area, we started near Atlanta, Idaho and over 5 days hiked to Redfish Lake near Stanley. The trail was so underused on the backside of the mountains that at times it was really challenging to find. We went days without seeing anyone outside our group, which is pretty wild considering how popular these mountains have become. At one point I realized we could hike 20 miles in any direction and not reach a road.
One rookie move was forgetting a hat. But then I found this one in the trailhead parking lot and it has become one of my favorites!
Being completely unplugged from work for so long was great. The team handled everything, nothing went wrong. I’d like to do a trip like that every year. Especially as my kids get older and they can come with me.
Learning to wakesurf
Knowing that we wouldn’t do much traveling this year I decided to pick up a membership to a local outdoor toy rental place and learn to wake surf. They have boats at our local marina and as a member the process is so easy. There’s no need to trailer, clean, store, or maintain a boat, so it’s perfect. The membership was $3,400 a year and it gave us plenty of opportunities to use the boat.
Wake surfing is far more fun than I expected and I’m looking forward to going even more next year. Here’s one of the highlights from the end of the season:
In October we took the kids to Disneyland for 3 days over fall break. We splurged and hired a guide so we could skip the lines. The whole trip was wonderful and I’m excited to do it again in a couple years as the kids get older.
If you ask Josiah, “What’s your favorite ride?” he’ll enthusiastically shout, “DUMBO!”
We timed it with a lull in COVID cases and the timing worked out great. Wearing a mask in the park wasn’t annoying at all. Though it was disappointing the shows were closed down, but that gives us something to look forward to next time.
Barcelona and Marseille
We took advantage of a lull in COVID cases to meet up with team members in Europe. Marc, the original ConvertKit team member, hosted a small group of us in his lovely town outside Barcelona. We had fun dinners out, winery tours, hikes, swims, and game nights.
Then Ashley and I went on to Marseille to see the PSG v Marseille soccer game. It was incredible. We loved seeing Neymar, Messi, and Mbappe all playing on the same team. It was also a good opportunity to burn some miles that had built up over years of not traveling and splurge on luxury flights. Lufthansa first class is always amazing!
Hilary’s sister lives in Thailand and with COVID we hadn’t seen her in 2 years. When Thailand changed their quarantine rules for re-entry we jumped on it and planned a family vacation in Hawaii. While not exactly halfway, it was nice to split some of the distance between Boise and Thailand.
With all the flights covered with airline miles we splurged and rented a house right on the beach.
We also did some offroading and it was so much fun. Definitely something I want to repeat!
2021 was a great year on the farm. At the end of 2020 we had purchased the neighboring property doubling our land from 4.5 to 9 acres. In 2021 we finished remodeling and building 3 guest houses (a 5 bedroom, a 2 bedroom, and a tiny house on wheels). All three had a great year on Airbnb, which funded a lot more development.
We finished a walking path around the whole property (it’s exactly half a mile), made a picnic area, planted about 25 trees, added new irrigation, and more. While it will still take a few more years for everything to grow and mature, I’m really happy about the progress we made.
Hilary and Ashley also made a beautiful fresh cut flower garden. Which resulted in many bouquets of flowers for us and our friends. They have plans to make it twice as big this year and maybe even sell some of the flowers.
Looking back at 2021
- Grow ConvertKit 40% to $36 million ARR — Not even close. We ended at just over $29 million ARR.
- Host two large gatherings on our farm (assuming COVID vaccines allow for that) — Nope. Didn’t host anything because COVID vaccines ended up being relatively ineffective at stopping the spread of COVID (though good at reducing hospitalizations). I’m not making any in-person gathering goals for next year because the world is too unpredictable.
- Sign a book deal — Ugh, no. With all the changes in the company I didn’t finish this. I have so much I need to focus on for ConvertKit that I’m not setting it as a goal this year.
- Practice piano at least 200 days of the year — I hit about 75 days and lost momentum. I’d need to hire a teacher to make progress and I just don’t have time for that now.
- Launch a new local news business — Done! And it was a huge success.
- Run a 5k in under 21 minutes — So close! I ended up setting a PR at 22:28 to take second place in our ConvertKit 5k. I’m setting the same goal for next year.
- Send 52 issues of my newsletter and record 52 podcast episodes — Not quite, but almost. The newsletter skipped a handful of weeks and I published 38 podcast episodes.
Overall I only completed 1 out of 7, but made decent progress on two others (the newsletter/podcast and running).
Here’s what I have in mind for 2022:
- Grow ConvertKit revenue 20% to $34.8 million — A more modest goal than last year, but it will still show significant progress.
- ConvertKit Commerce GMV crossing $2 million in a month — We have so much opportunity here and I’m excited to really scale ConvertKit Commerce!
- Take an epic sailing trip with Hilary — It’s been a few years since Hilary and I have traveled without kids. We’ve got a sailing trip planned for Belize at the end of February.
- Grow Twitter audience to 100k followers by April 1, 2022 — I started the year just over 40k Twitter followers and plan to quickly grow to 100k followers. Thanks to a few friends I now understand the algorithm and just need to put in the hard work.
- 100 gym workouts — Going to the gym twice a week makes such a huge difference for my happiness and health.
- Run a 5k in under 21 minutes — This is going to be the year I make it happen.
- 50 newsletters, 50 podcast episodes — Just staying consistent for long-term results.
Those are my main goals where I’ll be putting my attention, but I also have a few side project goals that don’t take much of my time, but are still fun to track:
- Grow From Boise to 20,000 subscribers and reach profitability — This will all be Marissa and the team, but I’m excited to help and advise along the way.
- Cross $750,000 in Airbnb revenue — This is across all the properties. It will be a stretch, but I think it’s possible. As part of this we are buying and remodeling the mountain house I grew up in.
Overall I want to rely on systems and habits rather than raw effort to hit my personal and work goals. I think it’s possible to have ambitious goals and a healthy relationship to work and plenty of time for family. 2022 will be the year that I pull that off.
7 Responses to “2021 Review”
Hi Nathan, I’ve been reading your blog for about 2 years now and I most love reading the yearly review posts. It’s inspired me to slowly but surely get back to working on my own blog. Traveling is something I want to do more of so I’m always inspired by and look forward to reading about the places you went throughout the year. Love the in-depth detail on the creative and business side too!
Wow!!! You’ve inspired me to create moments in 2022 I can look back on and cherish.
Congrats on all your achievements in your personal and professional life. I wish you the best of 2022.
Such a pleasure reading this. It gave me a good vibe. Thanks for sharing!
Once again…. your annual review is an example of a very rare combination of honesty, humility, ambition, and thoughtful reflection. Those don’t often go together – so thanks.
Always love reading these reviews. Hope the trip to Belize was amazing… Cheers!
Love reading your yearly updates! Just wanted to pop in and comment on your piano goal since I just got back into playing 6 months ago after a 15 year hiatus.
Having a piano teacher makes all the difference in the world. I had baseline knowledge from playing for a decade as a kid, but the insight my teacher has blows my mind sometimes.
It doesn’t take much time if you can find a teacher that will travel to you. I found one here in Scottsdale that comes to our home weekly and teaches my 6 year old for half an hour and then me for half an hour. Made an amazing difference from when I was trying to self teach.
Gosh I love reading these. The structure and layout is super digestible.
Thank you as always for the share! I know how much work it would take to craft this all together…