Making A Million Dollar Business in a Weekend | Noah Kagan

0:00All right, Marketing School listeners, this is my regardless.

0:31Tell us about how you go to therapy and you talk about Alex Ramosi. This is how it's starting. Wow. For everyone out there, when we look at other people and we get jealous or we get envious and, you know, with Ramosi and some other people, you see them like, oh man, I'm doing just as good, but they're doing better than me. And so I went to my therapist, Dr. Larry Resnick. Shout out, Dr. Resnick. He's like, Noah, what is it that you don't have? What is it that you want that you don't have? And it was an interesting moment to reflect back on my own life and my own, you know, YouTube videos and my relationship and my work.

1:08It was nothing. And that's an interesting kind of moment for all of us out there. When we look at others, it's good. It's good to be jealous. Jealous is good because it's a direction of, do I actually want that or not? Do I actually like that or not? But then the moment is coming back into yourself and it's like, do you have the things you want? Are you doing the things you want? Because the reality with it is that there's no amount of views that'll make you ever feel good. Like if I finally get a million, you will feel good getting a million. That is true, a million dollars. But there's never a amount of views or never amount of external things that finally make you feel good internally.

1:35And so it's coming back to how do I feel good and grounded internally? And so that was a$200, thank you, Dr. Resnick lesson. Just coming back to myself. So I think the key takeaway here is you realize that you have enough. Yeah. and you're just enjoying the journey now. Yeah. And I think it's fine for us to be jealous. It's cool to see other people living a life and say, do I like that haircut? Do I want to be doing those things? What is it about what they're doing? I can learn for myself and sometimes also going into it, like calling the person or reaching out to the person or being nice to the person and trying to understand maybe some of your envies or jealousies.

2:09You had a and we can move on from this topic right after. But there was a tweet where I was like, you tweeted about him as well. So like, I thought he was going to respond. I thought it was going to become this flame war, but it didn't materialize. Yeah, I'll just, I will say it. I like learning from people. I can see their businesses. I like learning from Andrew Chen. He's one of my best friends. He works at A16Z. My marketing mentor, and this is a cheat code for everyone out there, is you can get these elite mentors, 10 ,000 hour people for a thousand bucks an hour or less. It's Moody Glasgow.

2:42He is the CMO of Zapier, CMO of Glassdoor. he was the vp marketing ea like we have rajatish mukherji who is the gm of indeed like these guys work at real business you can see that's who i want to learn from and so when i see people out there that are like yeah i have 200 million dollar business i'm like okay show me the business oh you can't show anything you can't tell me anything you just talk about something i don't believe you and i've seen a business that her mozi bought who sold or bought it's called alan It's like an SMS tool and it's pretty much dead. So I am curious, these like a hundred million dollar businesses that no one else can see or experience.

3:16And so I think everyone out there, it doesn't mean the advice is not good, but it means like just be mindful and thoughtful about who you want to actually learn from. And I like learning from, you know, women. I just literally was on a Slack message with Jenny Bloom. She's our CFO advisor. She's the former CFO of MailChimp. I'm learning from people that like our company, this is how everybody in our company gets an elite advisor that we pay for. yeah and those are people that that i admire that i want to learn from and so it's only just for a lot of other people say oh uh he's so interesting it's like okay what's the business i think there's a couple takeaways there one one is like question everything two is like you're coming from a place of curiosity but also like you're also creating content at the same time right it's like it might that tweet might have might or might not have taken off um in a different context who knows yeah i was just expecting him to be able to prove it like you're talking about work with 100 million dollars which is a lot of money and if you said hey i'm actually only worth 10 which i think is what he's worth no one's gonna listen to you and so when you're claiming something that that extreme you need to prove it yeah like you can go i can show you my stripe right now and show you absolutely my revenue i can show you our paypal account i can show you this stuff you can go to our business and so when i'm talking about what it's like to run a hundred million dollar business or work directly for zuckerberg i can show you and it's not it's not that anymore i need to prove against to him is just like, I think people need to just double check who they're learning from and think about it.

4:36Right. Nice talks, by the way. So going to coaches, by the way, so actually Neil and I, we, so he, he tweeted something last week and sorry, posted, he posted something last week. And he's like, you know, I think hiring coaches is one of the like worst use of things, worst use of money ever. Right. And Mike Maples responds, all these people respond. And I'm just like, dude, he's like, he's like, has your coach helped me make money? Blah, blah, blah. And so we started going at it a little bit and then I actually copied you we have some coaches for people on our team and we're paying 500 maybe 750 an hour or whatever and it's like such a level up and then Neil's like no with no coaches I just rather just hire people that have been there done that but I think that's like there's like you can do both right hiring the people that have been there done that are generally overpriced and not available right and a lot of them actually haven't done it They're just at the company.

5:27And so what I found is the AppSumo.com way is we hire people that are hungry and a little bit more younger or a little bit more available to get. And they're just excited to be a part of AppSumo. And then we pair them with one of these elite advisors. And, you know, there's a lot of different ways of eating at a restaurant. There's a lot of restaurants out there. My restaurant with AppSumo and how we like to operate is we can now pay 10 ,000 hour people, 1 ,000 an hour, 500 an hour, and we get cheat codes. so we have elite advisors in all these different areas maybe it works for neil without it uh but like i have a ceo coach from reboot.io yeah who do you have oh yeah dan i have jerry oh yeah jerry yeah i mean it's been a game changer because if you try to hire these people full time yeah i think moody who's a cmo advisor i can't tell you his hourly but i think it'd be about a million dollars a year just to hire him wow like minimum minimum i mean if you this is a silicon valley elite person and so you can actually be able to get advice from him he's been coaching me about how we're hiring people like even had a great question last week someone was talking about different marketing strategies we can do and he asked the person he said hey are you gonna bet your career on this i was like what do you mean he's like yeah will you bet your career on this idea the person's like no he's like well we're not doing it i was like oh that's a good question wow and that was just one little question that he kind of said in passing yeah and it's interesting you know maybe it works for neil but if you look at literally every business out there if you look at every professional athlete out there they all have coaches it's really hard to see yourself without a mirror like even zuckerberg when i worked at facebook he's 24 years old and we're all you know super cocky 24 year olds and i remember sitting you know i reported to him he sat on his desk and he had this like old lady next to him i was like suck you're the man you know everything what do you need her for he's like oh i need a coach and that was his business coach yeah and it's kind of insane that you think about him too he had all these he had peter teal he had all the guys from um not benchmark i think benchmark one of these different he had a lot of elite advisors around him do you remember the the trillion dollar coach what his name is bill campbell bill campbell yeah so he coached what steve jobs larry page eric schmidt right so yeah neil is the one outlier you know look here's the thing even coming back to her mosey or neil like it can work for other people like if you learn from them and it works for you great do that dude that's what i learned as we get older it's like dude we have our own way and it's like whatever works for you yeah Yeah.

7:44I do want to go a little more into the coaching piece because I think it's super smart. Like you don't need$500 or$1 ,000 per hour. Like you can start smaller too. But I guess for you, like what's the framework right now? How many coaches do you have? How many coaches do you have for your team? How often are you meeting them? Yeah. So I have a CEO coach, which is Dan Putt from Reboot.io. And you can also listen to their podcast for free. And so I'll meet with Dan once a month. And then I also meet with him and my COO because we were having some relationship issues about how we were working together.

8:11And so having a coach there provided a space where like we've blown up at each other. Dan's like, all right, let's bring it back. Let's try to get aligned. For instance, last week with them, it was interesting to say, all right, Alona, she's amazing. She's the CEO of AppSumo. It was like, if I went away for a year, how would 2024 end? And we were both looking at each other like, we have no idea. We have a goal and we have some objectives, but are we very clear that if I left for a year, you know what to do in the business? And so it was like, no, we don't. Okay, great. Great opportunity that Dan created the framework for us to be able to talk about that.

8:43I have Eamon Al-Abdulla. He's a former CEO of AppSumo. He's the former CEO of AppSumo. I meet with Eamon three times a month. And so Eamon provides a lot more structure, a lot more consistency, a lot more thoughtfulness. It's just in a very patient way. He's not a hyper growth like we need a 10x tomorrow. It's like, let's 10x over the next 10 years. He aims for the singles, not the home runs. And dude, the singles win games. And that's, so with Eamon, a lot of times I'm coming, for instance, with AppSumo.com, we created AppSumo Originals, which is our, you know, our Amazon basics. It's low priced alternative options for entrepreneurial tools.

9:23So Calendly is 20 bucks a month. Our tidycal.com,$29 for life. Or there's MailChimp, which is whatever a month. We have sendfox.com, which is 49 bucks for life. And so went to Eamon and I said, all right, I'm going to take the originals team and we're gonna start a new project. We're gonna create a docusign alternative and we're gonna create a loom alternative. He's like, all right, well, hold on a second now. How's TidyCal doing? I'm like, dude, TidyCal is like, it's doing insane. It's going great. That's why we should like move on to a new thing because it's already doing great. We should move on to things like, okay, so this is doing great and you wanna move on to something else?

9:54I was like, oh, I see what you're doing there. And so that's coaching. That's, you know, sometimes you do need another person to provide accountability or provide support or provide a different point of view that you're not seeing. So that was with Eamon and we're meeting him three times a week. And then every single person on the leadership team has their own elite advisor. And so the idea there is that it was nice to hire people that want to be a part of AppSumo. So Sean, who's our head of revenue, he started as our junior salesperson, the most junior in the entire company six years ago. And now he runs an$80 million business.

10:25And so for him to be able to do that, we invest. So right now he has, do you know Outdoorsy? Yeah, we used to work with him. Oh, wow. yeah so yeah colin gardner the ceo cro of outdoorsy is his advisor nice um we also hired the cro of mind body online okay yeah yeah so we've hired these people for sean uh for our people team so anna runs our people team we've hired the chief people officer of duolingo okay so christine she's amazing what's like the rough range for these hourly almost every person is between 250 and 1000 an hour okay and so taking a step back people are like well i don't have i don't have lots of money okay can you get them for a hundred bucks an hour yeah and the reality is yeah most people even if you say hey this is the easy way to approach it hey can i pay you an hourly just to talk to you and just even offering more people will actually say yes to you like i get messages literally i don't know 10 15 20 100 a day sometimes hey can i talk to you and a very few will do something different if it's money or if it's some effort yeah and so and a lot of these people i don't have some crazy network that i just like hey i know you because i worked at mailtrade no i go on linkedin i look for referrals and i email or for a referral it's almost never cold.

11:30And it's just working backwards from who worked at a company that did the thing that I can learn from. So Moody, we saw that Zapier, which is a SaaS product, super big. We saw that he was their CMO. So we hit him up cold. And we said, hey, can we pay a lot of money to come and talk with us? And he said, no. And then we persisted. And they said, yes. And now it's been a year of working with them. And I would say our marketing is 180 because of working with him. Yeah. It seems like a lot of these people that are high performers, there aren't many people, like, it's like less than a percent that reach out to ask for coaching, probably a fraction of a percent.

12:03Yeah. And it's such a high leverage thing to do. And I think to your point, like, people that reach out to you, what stands out more, them offering you money or them, like, making effort? Either one. It doesn't matter. It's really separate. It could be even a compliment. I think the easiest way to connect with anyone, one of my marketing strategies that I've used at Mint.com, I use it at AppSumo.com, I'm using a million dollar weekend, is connecting with pre-fluencers so that's connect so a pre-fluencer is someone who's gonna be popular and they're available they're all out there and no one's really talking to them because people are thinking i need to talk to the people who have the attention get the ones who have attention and great audiences and you can kind of bet that there's a future for them it's like ali abdahl we were talking about before i connected with him three years ago when he was a pretty small channel maybe a few hundred thousand tens of thousands and that that created a relationship and friendship that we can work to today so i would try to find people that are up and coming because it's a lot easier to get a hold of them.

12:51You know, I think there's, you have to have a knack for seeing it. And like, I guess, how do you identify the pre-fluencers? Yeah. So it depends on the specific context and whatever your business is. So for, let's take mint.com, I was looking at who, there wasn't as much, there wasn't Twitter. It was 2007. There wasn't really much of a Twitter audience, but I was looking at whose blogs are in personal finance that I'm reading that are not CNBC, that are not Jim Cramer. and so it was like Jim from bargainering.org. It was like this guy named Viet from Stop Buying Crap. Yeah. You know him? No. Okay.

13:27So just different people and what I'm looking for specifically is engagement. So now with Million Dollar Weekend, I'm looking for people, basically three categories, entrepreneurship, real estate, personal finance. So people that their audiences want to make money or get their own freedom. Yeah. And so I'm looking for people that generally have 10 ,000 subscribers. It could be plus or minus around that, but they have high engagement. So when you go to their videos, when you go to their tweets, when you go on Instagram, when you go on TikTok, when I go on Goodreads, when I go on LinkedIn, this is what our team has done.

13:54I'm looking for people that maybe aren't the most popular, but there's a lot of comments, there's a lot of engagement with their content. So as I connect with them and I can help them out or they can help me out, there's a good relationship that happens in the future. Right. And are you doing that? It sounds like you have a team reaching out to these people. Like, how does that setup look? Yeah. So for, let's take the Million Dollar Week in Marketing, which has been, it's been really fun. Yeah. I like reaching out myself if I just like someone. I don't need a team or anyone to go do it. If I see someone doing something interesting, like Danny Miranda, this is a guy that's not popular in podcasts.

14:24That's a good example of a guy that's rising. I met Danny, I was his, I think, first podcast. Really? Yeah, one of his first podcasts. And it was just, he had a lot of heart. He put an effort in his message. And I was like, okay, come over to my house and let's do a show. Was he Austin-based? I think he flew to Austin. Okay, wow. For that. And so, yeah, it's just identifying people that I find interesting. There's not necessarily even a secret to that. it's just is there anybody that's doing something like okay that's interesting for example another guy on our team this guy's named jay yang jay yang is 17 lives at home with his parents i thought he was in college i was like are you in the dorms he's like no i'm room that's funny he's 17 but the guy is just crushing on twitter like he's just putting out really great content i just followed him yeah i didn't know he was 17 that's crazy he runs our social media now wow and so we're paying yeah and so he runs uh my twitter yeah instagram and linkedin and that it's because we saw him early, Jeremy and our YouTube team saw him and just connecting with interesting people.

15:18Like just say, thank you. Just say good content. It doesn't have to be a big, like, well, I've got to message them because I'm doing some tricky transaction. No, just be like, I like what you're doing. And then that potentially could be something in the future. Got it. So I want to talk about the business to set us up for the book. So we'll go business, then book. So tell us for those that don't know about your, because a lot of people now, you got a million subs on YouTube. They probably see you as a YouTuber, but to me, you're a business creator and you're more business than creator in my mind.

15:44And I think there's gonna be a lot more business creators coming, we can talk about that later, but tell us about the business and how it's doing today. Yeah, I mean, I didn't come from, I'm a creator trying to sell a book or trying to sell a course, or I have a business and that pays for the content creation, which I just like doing it. I've done it for 23 years. I like being public. I like putting myself out there. I like attention, like helping. And you know, you know, the backstories, There's number 30 at Facebook, number four at helpstartmint.com. And then I've started and failed so many different businesses over the past 15 years.

16:17A lot of different million dollar businesses, a lot of different failures. And about 13 years ago, I started appstuma.com for 50 bucks in a weekend, which the idea was, can I promote software deals online? Very similar to Groupon, and it's evolved since then. And so for 50 bucks in a weekend, I was able to validate a business that today will do around$80 million this year. Got it. What are... Here's a funny story with AppSumo. Most people don't know this, but I shared this with you before. I was working at a company and we ran an AppSumo deal and it was the best deal ever and I got in so much trouble.

16:50Did you get fired for that? No, no, no. I like the CTO was like, you just ruined everyone's week. And then I, cause I didn't tell anybody. Right. But then Chamath reaches out to me. He's like, Hey man, everyone makes mistakes. You know, it just matters that you keep moving forward or something like that. Wow. I forgot about that. Yeah, but it was, it was good. It was good for you guys. It was good for us too. It was the design website, the design coaching. Yeah, we taught people how to do web design coding. And I think we did a couple hundred thousand dollars in sales. It was a huge deal. That was so cool.

17:15Yeah. I mean, for taking the backstory, AppSumo, the original, I think for people out there that want their own business, and I think everyone should be a millionaire. Everyone should be rich. It's awesome. With AppSumo, what I noticed is that all these different things I worked on, like I did marketing at Mint, I did product management at Facebook, I did payments for Facebook games, like I worked for Mark Pincus and Farmville, all this stuff. And I just noticed that I enjoyed marketing. more people need customers and there's going to be more software in the world. And this was years ago. And so I was like, how do I test that out?

17:43And so that's what AppSumo is. It's like, we go find awesome software deals, get a, offer some awesome software products, get a deal and then promote it. And our tools are specifically for solopreneurs. So small businesses, one through four, you can go to appseumo.com and get 30, 40, 50 bucks, like tools for life instead of paying monthly subscriptions. Got it. Do you see a path or do you see it being capped at the 80 or do you see like a path to like double, triple? I'm just curious as to how big it can become if you even want it to become big or so literally what's crazy is across the street we're here in wishville boulevard los angeles california across the street 14 years ago I met with my mentor who's not my mentor anymore and I was like hey I'm gonna start this deal site for software and he's like that's not gonna work and there's only a few software products I don't even know why you're gonna do it that was literally across the street here did you go to UCLA no I went to Cal okay UC Berkeley got And so it was a good reminder for everyone out there that it's not that he was trying to hate on me.

18:38He was just like, I don't know if this is gonna work. So go do it. Start right now and see if people will buy these things. And it's been great. In Million Dollar Weekend, we'll get to it. It's like, are you picking the right market? Got it. At the end of the day. And the market got so much bigger that we were just around and it's done well. And with AppSumo, I think one of the caveats is my goal is not to grow a bigger company. I know that sounds counterintuitive. My goal is I don't care to be a billionaire. I'm already rich enough. This is great. I'm already living an awesome life. I don't care to just have more.

19:08And I think that's a Silicon Valley problem. I want more subs. I want more money. I want more. It's like I've got enough and it's great already. And so with AppSumo right now, our main goal moving in the future is how do we promote more software tools? So there's a lot of software creators around the world. There's, I was talking with Amit Gupta who created a writing tool. There's just all these amazing tools out there, but we can only promote someone who will do a lifetime deal on AppSumo. Mm-hmm. So that's a limited amount of, that's literally of all the software tools for small business owners, which is the only thing we care about, that's like maybe 5 % of the market.

19:39So how do we help tools that are getting started? And then how do we help tools that are getting going? Like you're already developed as a software tool for small businesses. So right now in the next three years, we have a three-year plan. How do we help the top of the funnel get started? Like, hey, get discovered. And then once you're already going, how do we help you distribute even more yourself? So do I think it's gonna grow a lot more? Yeah, but our growth, this is counterintuitive for people out there. we're trying to grow slower so our growth goal next year is seven percent and most people are like silicon valley is like you're not too works like andrewton i love my buddy i love him but he's like if you're not too actually you're failing right he's my time asian thing to say and i love andrew and he's he's one of the reasons we are where we are yeah you know he's coached me and been a great advisor and one of my best friends for many years but what i've noticed and our success is longevity and sustainability is a superpower i think that's becoming more of a theme too because Ali Abdaal who we just talked about he's got this whole he's got his book coming out feel good productivity right it's like does the business feel good too it's like it doesn't have to be all this I mean people in Silicon Valley their incentives are to keep pushing double was it triple triple double double double or something um but you don't have venture backing so you don't need to push like that you know yeah I love my work my my I literally I gotta come to Los Angeles I get to talk with you about business I get to teach people how to do their own businesses.

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23:28Do you want to know when I felt rich? Yeah. $3 million cash in the bank. I felt rich. I felt like everything go to shit. I'm still pretty good. I can live in India for cheap for the rest of my life. I can live in any other country, even in America, and be okay. But I felt very unstable and not rich until that point. And I think there's this thing that's not talked about because most people, I'd say 99 % of people are trying to create the money. And the reality though, is that even if you don't have a lot, and I think everyone should be a millionaire and it's available, how to enjoy money. I think that's being rich is like, how do you actually become a time millionaire?

24:01Or if you're making money, how do you actually enjoy it? And I don't think that's talked about because most people are still in the creation stage. But I want to come back to that in a little bit. And so going back to, okay, you're running this$80 million a year business. You're like, you are the CEO, you're operating, you're in the trenches, right? And you're also, you have this YouTube channel where you have a million subs. how are you doing that right now and writing and you have a book coming and you're on this tour and writing a published book with the major major publishing house how do we do it how are you balancing all because that's that's like three full-time jobs right now it is i mean most people like james clear tim ferris they just focused on the book and i remember when i talked to tim about the book he's like it's hard and it is really hard writing a book uh and also you have youtubers that are just focused on youtube and then you have software creators are just focused on that i just there's no rules how we have to live life just to take a step back like i love that i get to make youtube content i get to write a book i get to run a software company and i remember i talked with charlie hoen and charlie said why don't you just do it the noah kagan way or the eric sue way or your way whatever way you think is best can you can live it that way but taking a step back how do i how do i do it number one is scorecards everyone has a scorecard and so a scorecard is basically how do you have clarity and expectation on the outcomes of success for the people you work with.

25:19That's like the number one way I run the business. So let's take AppSumo.com for instance. So our goal this year, 80 million is gross revenue. Net revenue is 45 million. That was our target. You ask any single person in the company, they know our single goal. And that's what I learned from Zuckerberg, which is have one very singular goal to focus on. So 45 million net revenue. And now every single one of the team leads, every single person in the executive leadership team has their own three things scorecard. And we've agreed on what the scorecard is. They choose it. They know what our goals are.

25:45They know the priority and they choose it. Like, oh, here's the three. I'm like, okay, you do your scorecard. And ideally they do it if they need help. I'm there to be their advisor. I'm there to be supporting them. So these are like your OKRs. Your top OKR is like, you know, the 45 million in profit, right? And then everyone else has to move up to that. Everyone has their own three things in their scorecard that aligns to it. So there's very clear expectations. So that's part one. Part two, I would say, is having kind of CEOs of the business. So at AppSumo.com, there's Alona, who's the COO, and she runs the business day to day.

26:16So my job is to run the month to month. She runs day to day. So that's me stepping back and be like, you're running day to day. Is there a hire or a fire? Is there an organizational shift? Is there a prioritization? And so she's making that decision. Same thing with the book. And this is available for everyone. I didn't go write a book because I'm a great writer. I'm a great tweeter or a great blogger. And so I went out and found who can I have as the CEO of the book? Like if you think about Amazon.com and their success, this is something that's fascinating. they have the most CEOs in any other business.