Noah Kagan – AppSumo 2 of 2

“Finding cofounders is a crux people make not to start; it’s much easier to find them when you have momentum.” AppSumo is a daily deal site for software apps.

Matthew:
Are there any unique metrics or social proof about AppSumo that you would like to share with the audience?
Noah:
It depends if our competitors are watching. Um, I think the only metric that matters to us is the new Sumos that sign, that’s the only thing we care about. And I think what happens… what I’ve had a problem with was in my previous businesses I’m very like the business person who… and I can code and I do marketing and I do other things, but I wanted all the metrics. “We should try this, and we should do this, and we should do all this tracking shit,” and everybody buys all this tracking stuff. It’s actually one of the most popular stores on AppSumo and I’m like, “People are crazy on it,” but what I’ve found to be the most helpful is to just pick one thing. Because… and that’s what I learned from Zuckerberg at Facebook, which was, when I asked Zuck, I said what’s, he didn’t… I didn’t ask him but he said what’s the number one most important thing and he said, “Growth.”
And so I came to Zuck, and I’d say, “We have events, we should sell tickets on the event page, we’ll make a lot of money,” he’s like, “How does it help growth? It doesn’t, and you’re stupid now.” And so his clarity and focus on one thing, which was growth and domination, influenced me with AppSumo to say the only thing that matters is one thing which now is growth. So it’s the things that we do that affect new Sumo signups.
Matthew:
We know founders face unique challenges when they decide to launch a startup. What was the hardest part about launching AppSumo and how did you overcome this obstacle?
Noah:
As we… in the beginning it was just getting deals that was kind of a challenge. And figuring out which deals were the most best that people would want. That was definitely a challenge. I think what I have learned though at a high level in terms of strategy and, you know, process is what are the bottlenecks in your business? And that question alone is what I have focused on and that has been the biggest… figuring out what has been the biggest obstacle. So we weren’t growing enough at the rate we wanted to and so we did some analysis and we figured out it was because we didn’t do enough deals, enough specials. And so we said all right, what is limiting us from that? And this is (unintelligible – 00:01:59) our biggest obstacle. And then it was like, “Well, it’s because we only have one sales Sumo.” OK, that’s the biggest obstacle so then we spent, we focused on getting another person to remove that bottleneck.
And what I have learned in kind of the second stage of our business where we validated it, is what are the obstacles in separating myself from the business so I can see what is limiting us. So in the beginning it was getting deals, and then we moved past that because I hired someone. And then now it’s like all right what is limiting us now? It’s spending enough money on advertising, and so it’s like we need to find someone in advertising. I’d say the big takeaway for the people watching is what we found very helpful for us is thinking about strategy more, which I’ve never really done as much, and so that’s been extremely helpful.
I think we’ve (unintelligible – 00:02:40) just because we’ve done more strategy than tactics, and the second thing that has been very helpful is thinking about things as a system and a process. So not just, when we’re hiring people not just being, like, you know… on some of the people you know we’re not perfect, but on hiring we need to (unintelligible – 0:02:54.7). We actually have a semiformal process laid out, what are you looking for, why do you want it, and who is that person like? What is the (unintelligible – 00:03:03) what are the stages?
Another example is for deals. Deals used to be like, “Do this, and put that up, remember to email him and remember that,” and it’s like holy crap what a horrible system. So we were like kinda just get a system up so you can prove it. And so our system became a checklist. So now our deals (unintelligible – 0:03:17.7) checklist and on every Monday with the sales team I look at the checklist with them and I’m like, “Guys, did we do the checklist?” “Yeah,” and they’re like, “Oh, well it’s an inefficient system,” and then we improve it so it’s basically setting up systems for how you do your business so you that can improve them.
Matthew:
Since you’ve been in operation what have you learned about your business and your users that you didn’t realize before launching?
Noah:
Yeah, so what did I not know about the business before launching? I didn’t realize how effective hiring would be. In terms of like scaling the business it is the thing that no one talks about. Everyone talks about getting the perfect market fit and figuring out the idea, we actually got that, and we built something people love, and that’s amazing and so. But there’s not a lot of resource and information out there, how do you take that to the next level? How do you take that from a small business to now a successful, growing, scaled business? Um, so I was surprised about how much I had to think about that and read about that and learn about that. In terms of the customers and the Sumos I was surprised… I wasn’t surprised they would buy this stuff because we find we’re very picky. Like, I don’t put anything out on AppSumo that I wouldn’t personally endorse, and so I was surprised that people buy things that like, all right, people buy like one thing and then they buy something kinda opposite and it was like, “All right, that’s kind of neat.”
Matthew:
Lots of people admire entrepreneurs because they appear to make starting companies look easy and we know it can be difficult. So we want to dispel some myths here. My question to you is what do you make look easy? And when I say that I mean what comes intuitively or easy for you and what’s been difficult and how do you manage that?
Noah:
I think I’m probably one of the best people ever at stage one business which is making things happen. Like, for some reason I can bring people together, I can get things accomplished and I will very, very effectively make things happen quickly. What I am sucking at, and what’s taken me a lot to learn is basically growing that. So I get the business out there and the first part is easy, but taking it to that next level… and so what I have found helpful in doing that is saying all right, well what am I struggling with, right, and breaking that out. All right, so I’m struggling with strategy so I brought in Andrew Chen. And it’s figuring out what are the things that are limiting you and then actually trying to figure out how to solve them. So strategy was one, to grow the business. So Andrew has helped with that.
Another thing has been just build business acumen, hiring people, morale, so I have been reading a lot of books around that. There’s (unintelligible – 0:05:37.9) looking at alternative sources, he’s the double your dating guy, and so it’s kinda like the game, the book. Basically he has stuff that talks about business but it’s the underlying theories that I’m really interested in. And so I’ve learned a lot from him. I have learned a lot, like ultimate sales machine, copywriting books, so learning about things that are limiting the business. And I think, I was challenged with hiring people. A lot of times in business you want to do it yourself and so now that I have gotten better at it, saying if I can hire someone that’s better than me they can actually help grow the business. So I was definitely challenged with bringing on more people so now it’s exciting to hire more people.
Matthew:
What’s the most important lesson you’ve learned since launching AppSumo?
Noah:
I would say the most important thing is strategy is more important than tactics.
Matthew:
What bit of advice or piece of information do you wish you would have known before launching AppSumo?
Noah:
I’d like to… I mean it would have been nice to know the exact strategy to succeed ahead of time. And so what I mean by that is that we had our purpose, we’ve always had our same purpose, which is helping great customers find great companies, and we’ve spent time we built an award level, we built a directory, we tried bundles, we tried all these different methods, it would have been nice to know that the model that we figured out now, you know, a year ago. I would have saved a year of time. But it does help us that we have that kind of institutional knowledge now that if anybody else tries to do it it’s going to take six months or a year to do it. Or if they copy us they really won’t know the understanding of what it takes to get that and why things are the way they are.
Matthew:
What advice would you like to share with our audience about launching a startup? What do you think are the key elements if you have to distill it?
Noah:
Yeah, so I’d probably say there’s two or three key things. One, you need, in the beginning you actually, you can’t launch something that sucks. So I think you need to try very quickly to validate whether what you’re doing or not is useful. And if people will actually give you money for it and there is something that is a problem that they want to use or they want you to have you solve. The second thing is you want to have marketing be parallel with product development, so that when you if you’re working on it and it actually does work you don’t build something out for five months and then you’re like, “All right, well now let me figure out how I’m going to get people aware of it,” you want to build that in parallel, so I’d say those are probably the two key things that people need to be doing which is validate very, very quickly, don’t build a product, just email people, go talk to people and ask them for money that day. And it is awkward but it’s a lot easier than wasting two months of time.
I come back to a question we don’t normally talk about, I think time is something that actually has been a big difference in how I think about things now, I’m very different with my time now than I was five years ago. So I think that’s probably another thing that people need to think about is don’t waste your time, don’t have coffee meetings, don’t go to events that you don’t want to do, don’t be doing phone calls you don’t need to be doing, and how do you prioritize how you’re using your time to accomplish what you want to accomplish.
Matthew:
Before we close I would like for you to give our audience your vision for AppSumo and how you hope it will change the world.
Noah:
Yeah, so I think about that a fair amount, I think the thing is we built something people like and it’s flattering, I love it, and you know right now we do (unintelligible – 00:08:40) we do is a daily deal, that’s just the medium. The purpose is to help these customers, great customers, find great tools to succeed. And I think where we’re gonna be going is a marketplace similar to kind of the Amazon.com of digital goods and tools for everyone on LinkedIn, which is 100 million people, and so business professionals. And what Amazon.com is for books, we can be for tools and goods, digitally. So when people think of books they think Amazon, when people think, “Hey I need a tool for my business,” or “I need a tool to help succeed,” they’ll think AppSumo.com.
Matthew:
Noah, it’s been a pleasure having you as a guest on FounderLY.
Noah:
Thank you for having me.
Matthew:
We’re rooting for your continued success at AppSumo. For those in our audience who would like to learn more and join their community you can visit their website at www.appsumo.com. This is Matt Wise with FounderLY. Thank you so much, Noah.
Noah:
Thanks for having me.

 
  • Cthormanmt

    Very good, very good!!

 

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