The trade: info products for software
In his 2017 annual review, Nathan Barry wrote that in 2014 he decided to ignore his book and course sales to focus on ConvertKit (now Kit). His course revenue fell from a 2014 peak of $299,000 to $23,633 in 2016. He described the drop as a result of lost focus rather than a weaker market. This is a rare public account of what a founder gave up. The software result, in the same review, is on a different scale.
Sources: [1]
The 2017 numbers, as reported
The review reports MRR growth from $520,000 to $887,000 during 2017, an average of $30,500 in net new MRR per month. Net revenue rose from $4.1M in 2016 to $9.52M in 2017. Barry attributed a large part of that to a Cyber Monday promotion that brought in nearly a million dollars of annual prepayments. The goal of $1M MRR was missed. These are the founder's self-reported historical figures, not current revenue.
Sources: [1]
How the next target was calculated
Asked how he chose a 2018 goal of $1.3M MRR, Barry replied in the comments: $35,000 per month times twelve, plus current MRR. The team averaged $30,500 net new MRR per month in 2017; the goal asked for $4,500 more each month. Editorial inference: a goal built from the measured monthly net new revenue is easy to check every month and shows early whether the plan is on track.
Sources: [1]
Annual prepayment changes cash, not MRR
The Cyber Monday result is a reminder to keep cash and recurring revenue apart. Annual prepayments raise cash and net revenue at once, while MRR counts them as a monthly share. Barry also described splitting his own time: sales and growth in 2016, product design in the first half of 2017, then growth again. Kit's about page today lists 114 team members across 86 cities. Editorial analysis: as a company grows, the founder's choice of where to spend time becomes a deliberate allocation, not a default.
Reading MRR as five numbers
In a January 14, 2019 post written after ConvertKit crossed $1M MRR, Barry explained that MRR growth combines five figures: new, expansion, reactivation, contraction and churn. Monthly net new MRR swung from about $73,000 in one March to negative in a couple of summer months. He separated user churn from revenue churn, noting that beginner customers cancel more often, so user churn ran higher. He reported 2.2% net revenue churn and a goal of 0%. He also warned that companies define churn differently, citing a filing that excluded cancellations in the first 90 days. Editorial inference: publish the components and definitions alongside any headline MRR.
Sources: [3]
From email tool to creator business platform
ConvertKit now operates as Kit. Its pricing page lists features for running a paid newsletter, selling digital products, newsletter sponsorships and paid recommendations, alongside email marketing. The team page lists 114 people across 86 cities and includes roles such as head of creator community and a manager for Kit Studios, which offers recording studios to creators. Editorial inference: the product moved from sending email toward helping creators earn money, which lets pricing and features follow customer income. The pages reviewed do not show whether those newer revenue features make up a meaningful share of Kit's business.
Experiments you can run
Small, falsifiable tests inspired by this case. They are MRRTrace suggestions, not steps the company reported.
Set the goal from net new MRR
- Do
- Calculate average monthly net new MRR for the last six months, add a fixed increment, and multiply by twelve.
- Measure
- Actual net new MRR each month versus the target.
- Stop if
- Reset the target if you miss it three months running by more than 30%.
One annual-plan promotion
- Do
- Run a single time-limited discount on annual prepayment for existing monthly customers.
- Measure
- Cash collected, share of customers who switch, and their renewal rate a year later.
- Stop if
- Do not repeat if renewal of discounted annual plans is lower than monthly retention.
Timeline
Nathan Barry stops focusing on his books and courses to work on ConvertKit.
SourceCourse revenue falls to $23,633 from a 2014 peak of $299,000.
SourceMRR grows from $520,000 to $887,000; net revenue reaches $9.52M.
SourceCyber Monday annual-plan promotion brings in nearly $1M in prepayments.
SourcePost on the open metrics dashboard after ConvertKit crosses $1M MRR; reports 2.2% net revenue churn.
SourceKit about page lists 114 team members across 86 cities.
Source
What to take into your next build
- Focus has a visible cost; count what you stop earning.
- Base growth targets on measured monthly net new revenue.
- Annual prepayments boost cash and net revenue, not MRR.
Takeaways are MRRTrace editorial inferences.
Sources
- Nathan Barry 2017 annual review
- Kit team page
- Nathan Barry: Understanding ConvertKit's open metrics
- Kit pricing and creator features
This case study combines cited public information and editorial analysis. Outcomes from an established business do not prove that a new entrant can repeat them.