Start A Million-Dollar Business In A Weekend?

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1:33There's no safe like SimpliSafe. From Entrepreneur Media, this is Problem Solvers, a show in which entrepreneurs do what entrepreneurs do best, solve unexpected problems in their business. We were completely wrong. And I'm just like, it's not selling. It was like, we have to start from scratch. I'm Jason Pfeiffer, the editor-in-chief of Entrepreneur Magazine.

2:21especially when it was put into book form in a book called Million Dollar Weekend. Booked it incredibly well. I happen to be friends with the author. His name is Noah Kagan. And I've been meaning to talk with Noah about this book because, well, this guy really does know how to build businesses and how to make things that make money. Let me just have him introduce himself. Hey, it's Noah Kagan. Fantastic. But I guess in the business context. Yeah, the spicy stuff. I had a day job at Intel, became number 30 at Facebook to help build and was number four at Mint.com. Started a lot of different businesses until I was able to found AppSumo.com, which today will do almost$100 million a year in revenue.

3:04It's an incredible site online for software deals. Noah Kagan, no dummy, has accomplished a lot. Really got to pull it out of him in an intro. Anyway, like I said, I had wanted to talk to Noah about his book, million-dollar weekend for a while. And then the opportunity really presented itself because Entrepreneur, in its May-June issue, has this fun theme we called How to Unlock Your First Million Dollars. It's right there on the cover, How to Unlock Your First Million Dollars, where we're engaging with the question of where a million dollars comes from. And in all sorts of ways, we talked to a lot of entrepreneurs who had million-dollar unlocks.

3:40What did it take to unlock that first million in their business. Really interesting stories. We talked to someone who learned how to raise a million dollars, what it takes to actually get somebody to fork over a million dollars to a university. In that case, we talked about the way in which earning a million dollars opens up different meeting opportunities, who starts to be more interested in you because of it. Anyway, lots of stuff. And I thought talking to Noah about the million dollar weekend, really fitting. So that's what we did. you can find an edited version of the conversation in that issue on Stands Now.

4:13Go find it. But here on the podcast, you're going to hear the full conversation because Noah said a lot more than I could squeeze into a page on a magazine. So the first thing I wanted to know from Noah was, this is a big claim. A million dollars in a weekend? What does that even mean? Yeah, people don't realize that they can actually start things and get it going in a very short amount of time without a lot of money. And I've done it time and time again. And I've seen now that the book is out, people are doing it time and time again. There's a guy named Pat Goshtick. He's literally on the back of the book.

4:46He had a day job in Poland doing customer support. And within four months, he now has a$25 ,000 a month consultancy helping people do video editing. I've seen Mackenzie Seale. She had a job at Warby Parker in New York, and she had a dream to be an entrepreneur. And she launched a greeting card business. following Million Dollar Weekend that in her first year did$50 ,000. And so I never promised people will become a millionaire in the weekend, but they will have the process and the ability to launch something that will get them to the million dollars and beyond. So the proof is more in the results than me talking theory.

5:21I wanted to hear Noah talk some theory anyway. So here's what we're going to do on this episode of Problem Solvers. I'm having Noah walk me through some of the major steps that someone should take over the course of a weekend to launch a million dollar business. And we're getting into some interesting fundamentals about sales and his philosophy there, but also, well, how to find opportunity and what it really takes to move forward. We'll be hearing some of those examples and more of them, but also just the foundational things that anyone should be thinking about. And even if you know how to start a business, even if you have started a business, it's really useful to step back and think through what at its core are the most important things that you do.

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7:24All right, we're back. I'm talking with my friend Noah Kagan. He is the founder of AppSumo.com and also the author of this book, Million Dollar Weekend. And I started by asking Noah, can you define a million dollars? A weird thought, but if we're talking about a million dollar weekend, what does the goal here really look like? Cash, money, profit. That means you're not a fake YouTuber telling people you're a millionaire when that's really your house is worth a million, but after the mortgage, it's worth a hundred dollars. It's creating a business that can generate a million dollars in profit for you to take home over some period of time.

8:05Now, the other thing that I also encourage people to think about is you don't need a million dollars to live a million dollar lifestyle. And really about entrepreneurship is finding confidence and creating an awesome life through entrepreneurship. Which goes very much to your freedom number concept. You want to explain that? When I was working at mint.com, I didn't really actually like it, even though I did a great job of it. And I realized if I could create a number that I could do what I really wanted, I could leave mint and really live the life I wanted. And this is something that has been empowering for literally tens of thousands of people.

8:37Their freedom number is figuring out the number you need to actually do the thing you want. And what's mind blowing about it, the part that's really crazy is the number is always lower than people thing. And it's more achievable than they expected. And that's really empowering. Because once you get to go and do the thing, so for me, it was always$3 ,000. Once I was able to get that with AppSumo.com, I quit my day job, same at Mint. I quit Mint when I hit my number to build Facebook games. And then when I had a day job after that at speed date, I hit the number again. And I quit that to do AppSumo.

9:08And then when you're actually doing the thing you want, one, life is awesome. But two, that's how you can actually do what you want. And ultimately, I think you'll actually end up making even more money than you expect. The cool part of entrepreneurship is there's no limit to the upside. A day job, when you have a W-2, you're cap. When we look at the traffic at entrepreneur.com, one of the best trafficked kinds of stories are business ideas. For years and years, the story that would top our annual traffic roundup was something that was called something, the headline was like, need a business idea?

9:42Here are 52. And it was literally just a list of business ideas. And that has told me something, which is that there is a desire among many people to start a business. What you just said a second ago, I think people get it. If I'm a salaried employee, I'm capped. If I start my own business, there's infinite growth potential. But then the next step is, okay, what's the business? Where's the idea come from? And that's where people instantly get lost. And when they start searching for articles with headlines like, need a business idea here at 52. So when you're saying million dollar business in a weekend, obviously that's not stand up a business that's driving a million dollars in profit in a weekend, but it is starting the foundations of that.

10:24The foundations of it for many people start with the idea. Ideas often feel difficult to develop, take a lot of time. You got to be talking to a lot of people. You got to test a lot of things. You got to iterate. Give me the way in which you feel like people really should be starting if their end goal here is to build a cash flow positive, successful business. I think the ideas are bullshit. Ideas are bullshit. If there's so many great fucking articles out there with business ideas, there's literally, look, go on YouTube and there's millions of the ideas. And if it's all out there, how come people haven't become millionaires?

10:59Or how come people haven't had success in entrepreneurship? and the reality is it's not the idea that's the problem. It's that the person is afraid and that's easier to watch the video or read the article and idea and just go back to your day-to-day living or go back to Netflix. What's really holding people back and I identify this in the book through literally myself and tens of thousands of other people is that most people are afraid of starting and they're not ready, which is not true. And they're not prepared to ask people to be their customer or to be their employee or to give them feedback on that idea.

11:30And so instead of thinking about the idea, what people need to do is think about the problems. And you start getting excited about problems, and now you're talking about opportunities. And if you can practice starting, and if you can practice asking, then as you start getting into the, I call it the customer first approach, you start just being like, holy shit, the ideas don't matter. That's stuff bullshit. If I can get better at starting, I'm gonna get better at asking, and I get excited about these problems, now you're starting to follow the million dollar weekend process, which will lead you down the path versus, I can't tell you how many people I've met now and they read entrepreneur.

12:02They've bought the books, they bought the courses and two years later, they've got no progress. Yeah. What you're fundamentally saying here is ideas are nothing without execution. So the question then is, how do you execute? Of course. Yeah, so I can. Yeah, the execution is actually very easy too. So the way that you look at this is, and the reason I say it is a weekend, Jason, you have a wife and a kid. Do you have two kids? Two kids. Yeah. You're busy. Busy. don't have a lot of time. And you don't have a lot of time. And so the two components of how do we build a skill, right? I think that's people miss out on entrepreneurship.

12:36It is a skill that's development, just like learning a language, that the more that you practice it, the better it gets. So the skill of starting is the phrase that's gone famous from the book is now not how. So if you're thinking about a business, how, what are the things you can do right now, especially if you've got a family, how can you do things in a weekend? So let me give an example. If you were interested in starting a business, you're like, what can I do today? You're like, oh shit, what do you mean today? Yeah. Why don't I give up one Netflix show and change my life? And you start realizing like, okay, maybe I don't need the domain.

13:08Maybe I don't need to buy Shopify. Maybe I don't need to read another article. If I want to help someone, let's just take with email marketing. Is there one person I can contact right now and say, hey, I'm really good at this email marketing. I went through your emails. Here's three things you could change. Could you, would you want to be one of my first customers? You're like, yeah, you could do that right now. You don't need more schooling. You don't need a certificate approval to be able to do that. And I do it in the book through a dollar challenge where I literally pay people to read Million Dollar Weekend.

13:36And the whole point of that is that by practicing starting and doing things right away, you start realizing that that is facing the fear of starting, that is getting your courage, and that is ultimately building your confidence. And as you get to become a better starter, you start thinking, uh-huh, let me start it on businesses that I'm excited about. Now, the second part of this whole process that there's an exact process to keep following is how do you get better at asking? And that's really the fundamentals of business. Like all the billionaires I've interviewed or worked for, a lot of them will say the best skill to learn is sales.

14:06And what is sales? Sales is an ask. And so how do you, in the book, I teach coffee, the coffee challenge, which is globally famous about getting, asking for discount, getting rejected, realizing rejection's not so bad. And then you ask again, and then you ask again, and then eventually you start getting what you want. And those are the fundamental things. Going and getting, literally going to a coffee shop and asking the barista for a discount on the coffee? Yes. And I, for clarity, I want people to get rejected. Some people are like, why are you trying to take advantage of the store? No, no. I want the rejection.

14:39I want people to realize rejection can be a great learning opportunity and fun. And as you start practicing it, I literally had this woman, Kim, email me yesterday. And she said, hey, I'm a professional. I didn't want to do this. I thought it was silly. but I did it and I was terrified. And I said, great, Kim, what did you learn about yourself? She says, it was not as scary as I thought. And I'm more capable than I expected. What's next? And a great example in a business example is this guy, David Whitlock. David emailed me as well last week. David has a thousand person mailing list about Porsche vintage prices.

15:13Great. Which I was like, dude, hell yeah. Like I'm not into cars. I have a 2004 Miata. I'm not a car guy. Yeah. And so niche. There are people out there for whom they're like, thank you. Finally, someone made this. Yes. And I think that's a great, and I'll complete the story is that you can have big wealth without a big social media presence or without a big network necessarily. And so David has this thousand person email list. And because he's practicing starting and because he's practicing asking, he sent an email to his audience. He's like, hey, guys, I got an ask for you. You guys seem to love my newsletter.

15:46I have a lot of data on prices. Does anyone want it? It's 400 bucks. and David in one email in one day was able to do almost$10 ,000 in sales. It's awesome. Because he asked. And if you ask and you don't get, that's why I teach rejection. Great. You can ask them, why do they not want it? And you can learn. And as you keep doing this over and over and you keep following this process and you keep getting better and better until you eventually get a business and a problem that people are excited to give you money for and you're on your million dollar path. Let me ask you a question about asking. because the thing that holds people back from asking, there is your right, the discomfort with the action.

16:29If you get over that, I think the next fear is how many asks do you really get? Especially if you've built an audience, if you have people who you can reach, how many times do you get to ask them? How many things can you put in front of them? At what point do people just feel, ah, this person just keeps trying to sell me stuff? What's your answer to that? Most people don't have audiences. So I think that's generally not, that's a great problem to have. Sure. But let's shrink that down. Let's shrink that down because this guy built a newsletter of a thousand people. You could have just a social network in your community and you could have a professional network.

17:07Yeah, just whoever it is that you're able to reach. Let me give you two very clear tactics to copy that'll work in both in these instances if you're nervous or afraid you can follow these people. Number one, I call it the survey to sale method. You can communicate with people through a survey, asking them questions about themselves and learning the problems they have, learning the things about portion. Hey, let's take David. He didn't do the survey to sale method. He just asked. And I'll tell you that the second strategy thing is almost better. The survey to sale, when I was doing my book, for instance, when I was doing Million Dollar Weekend, I sent a survey and said, hey, I'm thinking about doing a book tour worldwide.

17:40Where do you think I should do the book tour? And then people would fill out the survey. And then everybody who filled out the survey, I personally emailed and I said, hey, you seem like you're interested in me speaking here. Are you interested in buying my book? And the survey method, what you're looking for, and this is really inspired by Seth Godin from Permission Marketing, is I'm looking for people to tell me problems that I can solve. And that survey, even though it sounds silly, was people saying, hey, I think I'm interested in your book. And so I just asked him, hey, are you interested in pre-ordering the book and joining my launch team?

18:07And it was like an 85 % conversion rate. Wow. And so surveying is a way of people basically identifying their problems. And if you can help them, which is really what business is, I think people make it this big, scary thing, but you're helping someone else. If I could help you, you're excited to give me money for helping on a problem you're identifying. Now, the other approach you can do if you're concerned about annoying people, and it is don't bother all of them. Just talk to one of them. And with bigger businesses, a lot of times what you do is you'll do A-B testing, which is instead of showing it to everybody, you show it to portions.

18:41And then based on that portion and statistics, you can roll it out to everyone. You could do that same thing. If you have a hundred person email list, get on the phone or send out a sale to 10 of them. And if 10 of them buy great, if they don't, then you could try something else. And so at AppSumo, we call this test and invest. So instead of ever really spending a lot of money on new ideas, can we go test it? For instance, we're launching a new VIP package for AppSumo and we're going to do all these things in it. But instead of building any of it, we're literally going to send it out to like one to 2 % of our VIP customers to say, hey, we're going to build this thing.

19:15Does anyone want to pre-order it? And if no one buys it, great. We can ask them why not. And if they buy it, great. Now we can actually deliver it and then launch it to the rest of the audience. Which is smart. Noah, you say to use a one minute business model to ensure you have a million dollar opportunity. The reason I'm bringing this up now is because where we've drifted into is into the question of how do I know that I'm doing something that's going to be successful? How do I know that I have, how to know that I'm on the right path. So talk to me about that. You know, I like this example is most people, when they ask me about getting rich and what it's like to be rich and how to do these things, I always ask them like, how's their revenue?

19:52How's your business? And what it tends to be is they're not a millionaire because they have not become a dollar an hour. And I've got to highlight this point is that I talk a lot about the basics and fundamentals and talking to customers individually. But all that, those are the things that have built AppSumo to become a hundred million dollar year business. and people, I want to, I'd like to have a business. Great. Let's get$1. And then once you get one, two, three, let's get four, five, six. And these are the basics that build up to it. Now, specifically with this business model, Jason, you said you were sick.

20:21You said you have a wife and kid. You said you have a day job. You've got side hustles. You don't have a lot of time, but we can change our life in a very short period of time. And that will add up. That'll compound with time. Now, the reality here is that there's two components of a million dollar weekend process. Number one is, are you in a million dollar or bigger opportunity, right? And what the one minute business model does is you don't need to go to Harvard, you don't need to watch more videos, but very quickly, can you understand the economics? If I make$10 per item, per book I sell, per interview I do, per lawn I mow, whatever business you're creating, if I make$10 profit, how many do I have to sell to make a million dollars?

21:00Cash. You have to sell 100 ,000. That's gonna take you forever. So the point of the market research and specifically the one minute business model is just to understand the challenge of how many and how long that will take you to get there. So if you're going to do it like, OK, maybe I need to make some changes. So a specific example that that's pretty famous was the sumo jerky example where I was selling jerky and I started it in a weekend just to show people that it's possible. And I was selling it one by one at twenty dollars per pack. And let me be clear, I didn't have jerky at this point.

21:32I was just pre-sold. We were just, I was just seeing if people wanted it. Yeah. To see if people want it. And if they, guess what? This is how everyone buys everything. Everybody, everyone buys things pre-sold. When you buy something on Amazon, how do you know it exists? You don't. When you get your Uber food delivered, how do you know it's from that restaurant? You don't. Your plane tickets, your event tickets, your hotel tickets. No, it exists. Tell me, do you know it exists? No, you don't. But the belief of the value was there. And so you were excited to pay for it. And if you weren't, that's great.

22:00because you didn't spend a lot of money and time on something no one wanted. And that's where people are getting backwards in all this business shift. They're doing something no one wants for too long and they're not finding something that people actually really want, meaning you don't have to convince them and then sticking with it long enough. So the one minute model really from that jerky example, I realized that selling individually sucks because it's gonna take me forever to get to the sales I was trying to do that day. But if I sold to companies and if I sold it in subscriptions, hey, can you pre-order for six months today?

22:30I was trying to make$1 ,000 profit in one day just to show people it's possible. That, the one-minute business model, changed the game for me. And I've seen it now in tons of different other business areas, just understanding basic economics of your business and what dials you might need to change to make getting to a million dollars easier. After hearing all this, I want to tell you a little story, run a theory by you, have you react to it. All right. So the story is this. I was talking with Barbara Corcoran from Shark Tank. And I said, Barbara, I love Shark Tank. I do. My wife and I watch Shark Tank.

23:00every episode. But there's one complaint that I have about Shark Tank. And the complaint, and it's built into the very nature of creating a show like this and putting it on television. So I'm not blaming Barbara for it. But the complaint is that it creates a narrative for aspiring entrepreneurs that to launch any kind of company, including random products, which is usually what's on Shark Tank. You need an investor of the scale and skill of Barbara Corcoran or Mark Cuban or whoever, because these people are there and they're saying, they come in, they often have some amount of sales, sometimes it's not very much.