📂 EXACTLY how Teachable got the first $1M ARR

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Here's what the founder of Teachable, Ankur Nagpal, said about growing Teachable to their first $1M in ARR.

Later, they'd sell for $250M!

Fall 2013

I was 24 years old and had just moved to New York City.

I knew I wanted to start a startup, but none of my ideas until that point were going anywhere.

To pass the time, I started teaching online courses on Udemy with my buddy Conrad.

We scaled this to a couple of thousand dollars a month in revenue, but since Udemy took 50% of our sales and cross-sold other courses to our students, we found it hard to grow beyond that.

So one weekend, I built a simple website to sell those courses on our own branded website and domain. We sent it out to his email list, and a few days later had made thousands of dollars in revenue — of which we could keep every last dollar!

This was more promising than any of the other startup ideas I had been working on.

I started to offer this tool to other course creators… and a handful said they’d love to try it out!

Six months of tinkering later, we formally incorporated the company in May 2014 and we were off to the races.

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May 2014

We formally started charging our creators a subscription fee in May.

While we started seeing traction almost immediately, our monthly recurring revenue grew a lot slower than we hoped.

In fact, a full year after incorporating the business and raising our seed round — and eighteen months after starting to work on the idea, we were only a little over $10K in MRR:

At the time, we had a team of 5+ people working together for a year… and we could barely pay a single engineers salary from our MRR.

But over the next few months, we implemented a whole new growth playbook that blew our numbers out of the water.

The six months after that we grew our MRR 7 times to hit more than $1M in ARR by November 2014:

This article breaks down exactly what we changed in the summer of 2015 to jumpstart our growth to $1M in ARR… and eventually, many tens of millions of dollars.

Sell the Transformation

Our product helped people create and sell beautiful online courses on their own website.

So it makes sense that this is exactly what our marketing message was at the time: “Software to build a beautiful course on your own website”
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The problem was not enough people cared or were specifically looking for this type of software. The universe of course creators at the time was relatively small — so we had to broaden our marketing message to reach more people.

So we pivoted our offering… Teachable was no longer just software to create and sell online courses. We became a single solution that offered you everything you needed to launch an online course business.

We went from selling software to selling the dream of owning your own business — and bundled training and education along with our software.

This messaged worked so much better.

We were able to massively broaden our top of funnel and reach many more people than before. A lot of this new cohort of customers were not buying software, but buying the outcome of owning their own business.

This also became a very valuable lesson that generally applies to marketing almost anything — don’t sell the product, sell the transformation of what the product enables.

Double Your Conversion Rate

We had a forever free plan at Teachable with a limited set of features and a very high transaction fee for anyone that sold online courses.

Despite that, we found that we were converting less than ~5% of our free signups to a paid plan… which is substantially lower than where we wanted to be.

Enter live workshops.

We started hosting a live weekly webinar weekly on Thursday afternoons where we invited our newest cohort of free leads to learn how to use Teachable:

During the workshop, we would give them a live demo of the software and show them how easy it was to set their online course up.

Eventually, we would close the webinar with a special offer that included bonus educational content and live group coaching… but to unlock it, they had to buy a paid plan LIVE on the webinar.

I know this sounds gimmicky… but it converted exceptionally well. At our peak, we were able to convert 30% of live attendees to paying customers.

We didn’t charge enough in monthly fees to make 1-1 sales viable, but these large sales webinars became a fantastic alternative to sell to 50-100 people at the same time.

We also put every single webinar registrant who did not convert into a tight email follow-up sequence, with another version of the special offer expiring every Sunday night, which added more sales.

Collectively, this funnel was responsible for doubling our conversion rate from free to paid to almost 10% (!).

Prior to implementing this, our prospective customers never had any urgency to convert to a paid plan. But these workshops worked very well to accelerate the timeline for them to upgrade their account.

Interestingly, our data also showed when people were on a paid plan, they became much more likely to launch a course and make sales.

So by charging people earlier, we increased the likelihood that they would launch their business and grow the payments revenue side of our business.

Finding Our Channel of Competitive Advantage

Every startup needs to eventually find the singular channel where they have an unfair advantage.

We found our channel in the summer of 2015.

Here was the unique insight that completely revolutionized our marketing:

The most successful creators on Teachable typically had a large audience. And within that audience was thousands of potential future Teachable customers — particularly, if these creators were in the online business niche.

When we discovered this, it hit us like a ton of bricks. This become the only real channel we used and we tried to double down on it in every which way, including:

Storytelling

We started to invest a lot of time and marketing energy in telling the stories of customers that had successfully used Teachable to launch their online business from nothing and completely transform their life.

Early on, we had two kids in their 20’s launch an online course on building iPhone apps and make over a million dollars while they were traveling the world.

This was a very powerful story that we shared in as many different channels as possible:

• We helped them get featured in traditional media outlets like Business Insider.
• We flew to Berlin to spend time with them in person, and recorded an online course from their perspective telling the story of how they were able to do this — and gave this course away to new Teachable members.
• We shared them as a case study when we raised money or did any of our own marketing.

John and Eliot became the poster child(ren?) for the dream that anyone could launch a successful online course business, do good in the world and make a shit ton of money in the process.

Affiliate Program

We then launched an affiliate program to financially incentivize our best customers to refer a lot of people.

We offered them 30% of whatever any customer they referred paid us — for the lifetime of that account.

We combined our affiliate program with live workshops — we started hosting “joint venture webinars” where an affiliate would invite their email list to a workshop that we would host.

We would share a value-packed presentation on how anyone can start and launch a profitable online course and end with a special offer to buy Teachable… with the affiliate earning 30% of the sale.

This started performing really well — adding $500-$2,000 in MRR every time we did one with someone with a sizable audience.

Equity Deals

We also signed an equity deal with our largest creator, Pat Flynn. We gave him equity and made him an official advisor to Teachable.

In return, he would:

• Run his entire business on Teachable
• Help us with product strategy, particularly since he was a power user of the platform
• Promote us heavily via his website, podcast and other online channels
• Run 1-2 joint venture webinars annually

This turned out to be a phenomenal deal for us. Pat and his team are incredible people, were super fun to work with and at one point he was single-handedly responsible for over 10% of our total MRR.

Whenever we were expecting a slow month in the summer, we did a Pat Flynn workshop and ensured we stayed on track with our growth goals.

Online Conferences

The granddaddy was bringing together all these strategies to host large online events or “summits” for aspiring creators.

We hosted a big summit in November 2015 — and then repeated it twice a year for the next 4 years.

These online events would allow us to showcase our best customers as speakers, make them look really really good and have thousands of attendees sign up to hear their stories.

We would end each session of the summit with a phenomenal offer to buy Teachable — in addition to the software, we would offer free online courses from every single one of the guest speakers.

The combination of the storytelling and the compelling offer converted incredibly well.

The numbers that our summits did at scale were nothing short of staggering, some data points for you:

• Our biggest summit ended up having over 60,000 attendees with thousands of people live for every single session.
• We once acquired almost $50,000 of new MRR from a single live workshop.
• By the end, each summit was acquiring 1,000+ new customers, including over 2,000 one time.

Why did these work so well? We typically got every single speaker to also promote them to their own audience, which drove us far more registrants than we would typically have.

Intentionality

The final big change we made to jumpstart our growth was being intentional about our targets and goal setting.

Prior to the summer of 2015, we would still market heavily and try to grow but we never had firm targets.

But then, we hired Andy G (who is now the founder of Circle) to run growth who built the habit of setting a growth goal for every single month. We would take that goal and then work backwards, to build a bottoms-up model for how we’d actually get there.

I share more about exactly how we ran this process at a talk I gave at Hustle Con many years ago:

This goal-setting was a phenomenal exercise because after we would set a goal, we would typically find “missing” revenue when we would try to build up to how we would actually get there.

We would then have to come up with a plan to find the missing revenue by scheduling more initiatives, until we could go into the month feeling good about our odds.

The month almost never played out exactly to plan, but being able to run a retro on every single initiative was incredibly helpful and quickly helped us identify exactly what was working.

And this necessity of having to find that revenue is what lead to some of our best channels and strategies.

What do you think?

—Corey

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