Optimize Episode 035: Noah Kagen on Knowing Your Customer, The Power of Habits, and the Million Dollar Weekend Philosophy

Learn More About Noah Kagan

LinkedIn: https://www.linkedin.com/in/noahkagan/ 

Twitter: https://twitter.com/noahkagan 

Personal Website: https://noahkagan.com/ 

Youtube: https://www.youtube.com/okdork 

Buy His Book Million Dollar Weekend: https://appsumo.com/products/million-dollar-weekend-ga/

Episode Transcript

Noah Kagan (Speaking)

00:00

But it was just such a strong value proposition and a very strong problem that people are excited about. I think that's what people need to make sure they have very clearly product market fit. What is that? It's that people are excited to pay or use your product badly. You're not having to convince them. And I'll tell you, I've done a lot of businesses over 20 years. Betterk.com, free calls, free calls to like all these different little businesses, I would say, where I was begging people. And when you find something you're not begging people to do, then you throw a little bit of marketing on the fire, then you have a bonfire.

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Nate Matherson (Speaking)

00:36

Hi and welcome to the Optimize Podcast. My name is Nate Matherson and I am your host. On this weekly podcast, we sit down with some of the smartest minds in content marketing, SEO, and go to market. Our goal is to give you perspective and insights on what's moving the needle in growth. Today I'm thrilled to sit down with Noah Kagan. Noah likely needs no introduction for most of our listeners but know that Noah is the CEO of AppSumo.com, one of the earliest members of the Facebook go-to-market team and the author of a new book, A Million Dollar Weekend. In our episode today, Noah and I chat about his experiences at Facebook, Mint.com and now the work he is doing at AppSumo. We then focus on Noah's new book, Million Dollar Weekend, and we unpack many of the learnings that Noah has had building and scaling multiple startups. In particular, I'm excited to learn more about Noah's approach to go to market for a new venture and personal branding.

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Ad Spot:

This week's episode of the Optimize Podcast is brought to you by Positional. My name is
Nate and I'm one of the co-founders of Positional. We've been working on Positional for about 10 months, and we've built a handful of what I think are pretty awesome tools, including we've launched Content Analytics. Content Analytics is kind of like a heat mapping tool, but for a content marketing and SEO team. We provide granular insights
into where users are dropping off within your pages. And we've actually just launched a couple of new capabilities, too. We've launched Click Mapping and Click Tracking to give you better insights into where your users are clicking and converting And we've also launched a more general heat mapping view to alongside our readmaps
We'd love for you to check out our entire tool set at positional.com

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Nate Matherson (Speaking)

Noah thank you so much for coming on the optimize podcast

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Noah Kagan (Speaking)

02:18 Dude shout out Positional.com!
All right, we're here!

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Nate Matherson (Speaking)

Don't worry, we've got an ad spot that hopefully all of our listeners have just heard. But I want to learn more from you and I want to learn more about your experiences. But as a starting point, I would love to know who Noah Kagan is and how did you get into growth marketing and startups?

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Noah Kagan (Speaking)

I got into startups. One, I didn't like that anyone could just take away my career. I thought that was, you know, I never wanted to have one person decide my livelihood. And I was excited. I was always excited to be curious in how to be an entrepreneur and how to make my own money and be able to live a life that, you know, what kind of life could I live? And that led me to startups. And I think what I noticed really early on was that startups actually seemed a lot less riskier than these day jobs. And in a lot of startups, you can actually even get paid a lot more than a traditional job.
And so that was always something exciting. And so who is Noah Kagan? You know, I think professionally, I felt very confused, like worked at Intel, but then I was always trying things. I was always experimenting. And that led me to Facebook and Mint and learning marketing and product and then starting all these other businesses
that led me eventually to culminate in AppSumo.com, which is my life's work, which is like, how do we help software creators promote their tools to small business owners? And I also have a book that showed people exactly how AppSumo is an $80 million a year bootstrap business, so exactly how other people can do that themselves.
It started with a $12 sale 14 years ago, as well as done a lot of other marketing. I think I'm known for a YouTube channel that had a million subs right now in about two years. And I think I've done a good job figuring out how to do marketing in creative ways. Like even at Sumo, we have tacos instead of ratings. It's a small thing, it's super small,
but it's stuff like that, that you do these kind of things that like who's your customer and what are the things you can do for them. It's worked out well where I think I figured out a lot of growth marketing in a lot of businesses over and over again. 

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Nate Matherson (Speaking)

For all of our listeners that might not be familiar with AppSumo.com, what is the core value prop of AppSumo and what do you do?

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Noah Kagan (Speaking)

04:14

AppSumo.com is the number one site online for software deals. So we do two things. If you're a software creator like Positional.com, how do you get customers? So you make a podcast, which is what we're doing here. You do content marketing. You do Twittering. You do ads. You do prayer, as I like to call it, where you literally pray and hope customers come.
And with AppSumo, you can literally do a deal on your software and make $100,000 by us promoting it for you. And for a customer, if you're an entrepreneur, you are aspiring entrepreneur, we have insane one pay once software promotions of these products that you can now instead of paying, you know, $20 a month for Calendly, you can pay $29 for life and have tidycal.com. And that's something that I was able to find out and get started within a weekend 14 years ago.

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Nate Matherson (Speaking)

Is a lifetime deal most oriented for a bootstrap startup like one that kind of needs an upfront
influx in cash to actually start building or keep building, and maybe not necessarily a good strategy for a venture-backed startup.

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Noah Kagan (Speaking)

Looking at the data, Udemy, I think they're public, they're worth a billion dollars. They launched on AppSumo. Mixpanel launched on AppSumo. Optimizely launched on AppSumo. Hoppin sold for a few billion, I think, and launched on AppSumo. MailChimp has been on AppSumo, Dropbox has been on AppSumo, FreshBooks was on AppSumo, LinkedIn was on AppSumo. So, no, there's different marketing channels for different businesses. So if you have a lot of cost, then maybe it's not right for AppSumo. But it's really if you can understand what the economics look like in your business. For a lot of entrepreneurs, it's like, hey, I want to get a lot of customers. I want to get a lot of feedback.
I want to get a lot of exposure. Like the recent, I would say, unicorn of AppSumo is Cast Magic. So it's two guys, Blaine and Justin. Kenap Sumo is cast magic. So it's two guys, Blaine and Justin, they built a tool that can take your podcast just like this one and then create automatic show notes and everything, which is what I've used on my own Noah Kagan show. And they don't know how to do marketing, but do they want to spend money on ads? Do they want to be tweeting for two months, hopefully, to get customers? They want to do cold outreach. Instead of Kenap Sumo, we do the copy for these people. We do beta testing. We have a thing called beta links, where they go through your product and tell you how to is solopreneurs, so freelancers, agencies, startups. Launching AppSumo, I can't share their numbers. It's for them to share, but they made a ton, you know, over six figures. I don't know if they're, I don't even know if they got funded, if they were funded or 
not before. A lot of people get funding after AppSumo too. And now I believe they're at a million ARR. And so they use that AppSumo as their, you know, early product launch, as their go-to-market strategy. You know, you can launch on Product Hunt. I love what they've done. I love Product Hunt. I think it's great, but you never get paid. You get a lot of onlookers and, you know, window watchers where they're just peering 
through and kicking the tires, but they're never paying for you. AppSumo has customers. So I think with AppSumo, your original question, is it good for funded? Probably. But is it good for non-funded? Yeah, that too. It's good for, and this is for everyone out there in marketing, it's like, what's the problem you're solving?
Who is the customer and where are they? So if you're a software creator targeting, and we only help solopreneurs, we're not interested in like enterprise crap software. It's just never, it's not our interest. But if someone's creating software for those people, we are the number one place to promote it. And if there's a better place, I would have never started this business or I'd close it down today.

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Nate Matherson (Speaking)

07:28

Our company, positional.com, is backed by Y Combinator. And one of the most popular threads in the Y Combinator community this week was titled, Is Product Hunt Dead for Startups? And I guess I'm gonna ask you the question,
is Product Hunt just died, or is it still a good channel? 

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Noah Kagan (Speaking)

Well, it depends how you define good. Product Hunt is interesting, I would say, I think there's different things that are going on with it. One, it's very broad, right? So you can have the MetaQuest VR3, and then you have a SEO content marketing tool. Those are two very different audiences.
Right, so that's one thing. Number two, you do all this promotion to product on this one day and you give them all of your audience. And then maybe you get back a little bit more. And then likely a lot of that audience is not paying you. Right, and I think what a lot of people are fighting for today is attention. And then specifically qualified attention.
And so we do some launches, like so TidyCal.com, we've launched it three times. So again, you can also launch your product time and time again, but there is saturation about that audience. And right now there's so much fragmentation of audience, right? There's a lot of people now, instead of seeing launches on Product Hunt, they're launching on Twitter and they're or they're getting launched on AppSumo.com.
And so I think that's also an opportunity to compete with them for people that are out there. And for us, we're interested in we're only interested in software for small businesses. That's the only thing we care about. Is it dead? No, I think people can still do it. But I think you have to work backwards from what's my goal and then what is the best place or places that can help me reach those types of customers that I want.

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Nate Matherson (Speaking)

08:51

And just one more quick tactical question about lifetime deals. So, Optimizely, they launched a lifetime deal on AppSumo.com. Is that still available to the customers who purchase it? Is it really lifetime when they mean lifetime? And then as a follow-up to that, do they get the updates and improvements, or is it set in stone? This is your lifetime access to this product at this point in time.

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Noah Kagan (Speaking)

09:15

Yeah, so we've evolved over the years. So when I started out Sumo in a weekend for 50 bucks, and again, if people want to copy exactly how I've done it, you could do it for all startups. Like this is an $80 million a year revenue business. I literally used the Million Dollar Weekend formula. And I just started another business last weekend
that's going to be a million dollar business using the same formula. And I can, if you guys are curious, I can walk you through that. With Optimizely, when I started it, we weren't doing lifetime deals. And this is how, you know, in business, it's noticing what your customers are responding to and what's working. I think the deals at that time were like one year deals. And then through listening to our customers and looking at data, maybe about seven years in, it was like, hey, can we do a lifetime deal? And especially with software, the marginal cost of distribution or maintenance is very low. So if you can understand that you're the cost to acquire a customer and understand it, even with napkin math, you're like, holy crap, we'll sell it at $50. We'll get, you know, let's say half from AppSumo, $25 bucks. But supporting this customer cost me $5 over the next 30, 40, 50 years. Plus there's breakage, meaning that if you sell a thousand, only 50, you know, 50 percent might use that. Like that could be insane economics. And then in terms of your other question, we want to be transparent. We want you to know that we've been around for a long time because of trust and we have a 60-day refund policy. And all that to say is that if every business went out of business, like we would not stay in business. It does happen. A lot of businesses go out of business. And once we've promoted a partner, it's hard for us to control what they do. We do our best. We do our best to,
sometimes we even try to find new buyers for companies. Sometimes we've helped support build it because we don't want these companies to go out of business. The terms that we do our best to stay up front, but a lot of companies like Cast Magic, these guys have done an excellent job where they said, here's the stuff you're gonna get from AppSumo, and there are other things that generate MRR that you can pay for afterward if you want to use our service. And even with some of the Sumo links, what we call the AppSumo customer, they have hooked up people who have asked. So I think Cast Magic is one of them. Neuron Rider. I think Neuron Rider is an AI writing tool and we're pretty much their exclusive marketing channel.

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Nate Matherson (Speaking)

11:06

Well, I definitely want to talk about the new company that you've just started. And I think it'll be the perfect example as we talk about Million Dollar Weekend, your new book. But first, I want to learn more about the work you did at Facebook. I know you're the 30th employee at Facebook, and in preparing for this episode, I went deep into your blog archives,
which we're gonna include in the show notes of this episode.

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Noah Kagan (Speaking)

11:27

Nice.

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Nate Matherson (Speaking)

11:28

I particularly liked the blog post you had about getting fired from Facebook. What was it like working at Facebook in the early days, and why did you ultimately get fired?

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Noah Kagan (Speaking)

11:38

So what's interesting by the way on that, and when you're starting a business or you're doing anything, you want to validate really quickly whether people want it or not. And so that blog post was more cathartic. It was like, hey, I want some therapy for myself. So I wrote this post, posted it on Saturday, and by the end of the Saturday, it had 100,000 views.
I was like, oh, people like hearing me fail. The word, there's a German word called schadenfreude, where you like to see the failures of others. That led me to actually write a book about that experience. And then that led me to also share more of my failures, but also my successes. But noticing, wow, if you share more openly, the responses work. And that's even led to what has ultimately become Million Dollar Weekend. With Facebook, it was special, man.
It was really special. I felt, and for everyone out there, if you want to get a job at Positional, if you want to get a job with appsumma.com, if you want to get a job with someone else, what helped me get the job, and I think this is an important part, was that I made it easy for them to hire me. Meaning, number one, I was building all these college-related online businesses. So I built a college directory called collegeup.org. I built ninjacard.com, HFG Consulting. I built this local networking events for young entrepreneurs.
And when I applied for the job, I didn't have any network. I submitted a resume and a lot of mock-ups of what I would do with Facebook. So I created like Facebook maps. I was like, oh, if you're trying to meet someone else, have a Facebook map and here's how the page will look. And I did it. So I showed them, I didn't tell them what I was gonna do and that helped me get the job.
What I did there, it was just chaotic. It was my boss was fired my first day. Mark was like, don't try to sell my company. I was like, okay, I just left Intel, dude. I don't know what's going on here. He's like, there's your desk, get started. I used my own laptop day one and I sat on a corner of a desk
it was a great environment for me. I thrived in this chaos and it was, you know, I helped build Facebook ads, which I think, you know, was a trillion dollar business off ads. I helped build Facebook mobile with Mark Slee. I came up with status updates, which is, you know, pretty much all of Facebook and Twitter. So that's something they didn't want to do. And it was an amazing time to be around a lot of excellence. And I would say that was really the biggest takeaway from Facebook where, you know, obviously Mark had a giant vision, which I think is not discussed.
Secondly, he was very focused on growing towards that vision, which I don't think is really clear. But ultimately, I think he really surrounded himself with a lot of excellence. He had Peter Thiel, who's a genius. He had Mark Andreessen very early on. He had business coaches early on. Look at the... People don't talk about the Facebook mafia. There are some really impressive people that have left Facebook. Dustin Moskovitz, Asana is a public company. Charlie Cheever, Adam D'Angelo, Quora. Adam D'Angelo's on the board of OpenAI, Noah Kagan, AppSumo. I'm throwing myself in there, you know, on the lower end, but still throwing in there. And he did a really great job of that,
and that was just so special to be around this high bar. And I think that's provided a lot of dividends for me professionally over the past 20 years.

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Nate Matherson (Speaking)

And after Facebook, you're well known for leading the go-to-market initiatives at Mint.com. And we are gonna talk about your book. And in your book, you mention marketing is easy when you have a great product, or at least it was at Mint. Is that still true?

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Noah Kagan (Speaking)

14:37

Yeah, oh, 100%, absolutely, absolutely. Now, here's the question to think about. If you have a great product and there's two approaches, there's a guy who I've become friends with, his name is Paul Miller, he wrote a book called The Pathless Path. And he chose to follow his own path and he wrote a book about it,
and over, I think, a few years now, he's sold 45,000 copies. So Paul's approach is, I wrote a good book and I just left it out there to have people find it, and over three years, it's doing it. Or on the other side, with Million Dollar Weekend, I think, with me and Tal Roz, who never split the difference,
we're promoting it like crazy. So I'm using the same exact Mint marketing plan that I came up with 15 years ago, the same plan that I did at AppSumo, same plan we did at TidyCal.com, same plan I did on my YouTube channel, same plan you can even get the Mint Marketing Plan for free at AppSumo and I'm following that. And so could we end up at the same destination in a few years? Yeah. But for me, I don't want to hope. I don't like hope in business. I don't like surprises. I don't like surprise birthdays. And so if you have something great, yes, you can put it out there and pray. Or if it's great, it makes it so much easier than if you're actually putting a little force behind it to make sure that for me, I'm excited to tell people about these things that I've created or I believe are great for
them. I think most people, when they think they have marketing problems, they're like, hey, I'm having a tough time getting customers. It's not a marketing problem. It's a business problem. And Mint was a really interesting... My learning of that, same with Facebook even, where the product was so compelling, the marketing was frankly just easy.
I don't know if another marketer would have done as well as I did, a million users within a year at Mint, but it was just such a strong value proposition and a very strong problem that people are excited about. And I think that's what people need to make sure they have very clearly product market fit. What is that? It's that people are excited to pay or use your product badly. You're not having to convince them. And I'll tell you, I've done a lot of businesses over 20 years, bettercade.com, free calls to, like all these different little businesses, I would say where I was begging people. And when you find something you're not begging people to do then you throw a little bit of marketing on the fire, then you have a bonfire.

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Nate Matherson (Speaking)


And your new book, Million Dollar Weekend, what prompted you to write this book?

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Noah Kagan (Speaking)

I wanted to.

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Nate Matherson (Speaking)

16:33

Why did you want to? Like, if we're being honest, like, you're, I don't think you're trying to make money from writing this book. You might be, but like, I assume that you've already got quite a bit of money.

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Noah Kagan (Speaking)

16:43

How much money do you think I have?

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Nate Matherson (Speaking)

I think you've got a decent amount of money.

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Noah Kagan (Speaking)

How much is decent?

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Nate Matherson (Speaking)

Like, I don't know, enough money to buy, you know, a nice house, a nice car, a couple of racehorses.

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Noah Kagan (Speaking)

Dude, is that what you would do? Would you buy a racehorse?

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Nate Matherson (Speaking)

16:55

Oh yeah, of course.

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Noah Kagan (Speaking)

16:58

Do you like horses?

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Nate Matherson (Speaking)

16:59

Like, that's the whole reason I'm building Positional, to eventually buy a racehorse. My lifelong goal is actually to win the Kentucky Derby. So like, if I die without winning the Derby, then I haven't achieved my life goal. And to do that, you need to make a lot of money. So that's one of my goals. Of course I have other ones, life and family.

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Noah Kagan (Speaking)

17:17

Dude, hell yeah.

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Nate Matherson (Speaking)

17:18

All sorts of good stuff. But yeah, winning the Derby, that would be number one for me. But I assume that you can't buy a Derby winning horse with the proceeds of this book. You might be able to, but besides money, why would you write this book now, I guess that is the question I wanna know.

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Noah Kagan (Speaking)

17:34

For sure, I don't think I'll lose money. I think it's an investment, but I definitely will not make money on this book. Maybe if it ends up selling a million, there's a chance of it. For me, there's, I would say two answers. The honest answer is that I wanted something that was going to be very hard and that I would have to face myself. And I knew it would take a long time to put together a book. Putting together a tweet or putting together a Facebook ad or some of these things are, you know, the cycles or is it a semester or a quarter? And I wanted to do something that was going
to take years. And I knew that this was a project that you can't do a traditionally published book within a short period of time. And it made me face a lot of myself and my insecurities. And that was, I would say, the core of putting the book together. It was like, can I really help other people do what I've done? And I don't know, it made me feel very self-conscious about that. And the answer is I can. And the answer is everyone can for themselves. And the other side of this, I would say, just like AppSumo,

1
0:18:21
if there was a better place for software companies to promote themselves, I would have never started or I'd shut it down today. And I believe the same thing with Million Dollar Weekend, where if there is another book that I could have had when I graduated college and I was like, man, I've always wanted to do a business, but I don't know where the hell to go or what to do. If there was another book, I would have never written this, but there isn't. And now I'm excited to tell people that's what their dreams are, that this is that book.

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Nate Matherson (Speaking)

And I got an advanced copy of the book and I found it really interesting and engaging. And there were a few sections from the book that I wanted to chat about specifically. And the first is a question, and it also kind of leads us into that new business that you're starting. But my question is, what makes for a good million dollar idea? And then maybe as a follow up to that, like, would love to learn more about this new million dollar idea that you've started.

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Noah Kagan (Speaking)

I'd say a few factors come into play, which is that, is it a million dollar opportunity? Is there a million dollars of people, a million dollars worth of spend that can be happening in the area that you're building? And ideally, even the next step beyond that is that
area of spend going to be growing in years to come, right? Or is it fixed or declining? You know, I like to tease my friend, he was in Y Combinator, that he likes choosing businesses declining. And even if you do great, you still fail. I won't call him out, but I'll say he did like newspapers. That's been a struggle. And then he did COVID masks. That's been a struggle. And he's actually a strong entrepreneur. But even if he does well, every year his business now is declining
and he's moving on to something else. But at least he's swinging. I always respect that. You know, you take something even like positional, right? So really what most people do is they're gonna work hard on something. So at least find the thing that if you work hard, that the result and the upside is high.
And so what you can do at a very superficial level, which again, I encourage people to do. Like I want you to do it superficially to see, hey, is this something, one, is the market good, but also do people really want it? That's just as important. Like you can have a big market of something that no one wants, right?vLike there's a lot of people that have yards, all right? Well, I'm gonna create software for yard maintenance. And then no one wants that, okay? So that's the point that's important, especially let's even take positional. Like how many teams are out there that spend money on this stuff, or what's the value to them,
and how big is that market, right? And again, I'm not trying to have like, I need to know the exact number, but I want to know, is there a million dollars that I can personally make from that?

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Nate Matherson (Speaking)

In Positional's case, definitely.

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Noah Kagan (Speaking)

And what gives you that confidence?

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Nate Matherson (Speaking)

20:37

Well, you can look at some comps. I think at Positional, we're trying to build something a lot bigger than just a pure play SEO tool. We're very much trying to build the inbound marketing tool set, and then I think I look to other comps, like HubSpot, it's a $28 billion company, doing multiple billions in revenue each year. And so for us, it was like very clear that like if we succeed in building this business, I don't know if we will, I hope we will, like there at least is a market for it. You know, we're initially focused on content and SEO tooling and we started to get into analytics and CRO and social too. And a lot of people will say like SEO is dead. People have been saying SEO is dead
for the last like 10 years since I've been doing SEO. So I'm extremely biased, but I think where we've started, there's definitely a market, and there will be a market for the foreseeable future. And I think broadly with our business, companies will always need to acquire customers. And so if we can build a tool set that'll help companies acquire more customers,
no matter the channel, I think there will always be a buyer for a software toolset like that. So that's at least how we thought about Positional
when we were first starting it.

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Noah Kagan (Speaking)

Yeah, for Positional or for other businesses, it's really like how many people are out there that could buy this product and how much are they spending? And what size is that? And the idea too is that do you think that size of that market is gonna grow? And so I like that you guys are trying.
You know, I think what I'd be curious about is like what's the one thing that people are like, oh my God, yes. And I don't know, because there's five things here, and some, especially as people get going, it's just have the one thing that people are like, yeah, that's the thing I actually want. I'm curious, what is that for you guys?

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Nate Matherson (Speaking)

22:09

At Positional, we actually have eight tool sets today. We're still in what we call our private beta. We're doing our public launch in March, so we'll have a self-service product. And the reason we started this company was to do two things, roll up a number of different point solutions into a single workflow, and then also just build tools that we've like never seen before
that we've always kind of wanted. And so I would say that there are like two or three kind of core tools to our toolset that are like fairly unique and differentiated and that's often like a hook to get someone to like you know consider positional or possibly switch to Positional and then replace some of those other point solutions they're using in the process. For us like my favorite feature would be our content analytics tool set. It's kind of like a heat mapping tool, but for a content marketing team, and it provides really granular insights into how people are engaging within your pages and where they're leaving. And then that takes you to our buyer journey product, which essentially is a map
of all of the actions a user takes once they reach your site. And so one of the big kind of differences in positional versus like a pure play SEO tool is we're trying to connect the dots from driving traffic to actually getting the traffic and understanding it and then converting it. And so in some sense, we replaced tools like Hotjar, Google Analytics, also some pure-play SEO tools, which I had mentioned. And so we're trying to bring that entire workflow together and ultimately help companies drive more traffic
and then do a better job at converting it. But I definitely think like, you know, something we worry about is like launching too many tools and them not being at like a high enough bar in terms of quality. It's something that we're very, very paranoid about. Like we are moving quick in terms of new tooling, but we don't want to release something that's not at least 80% as good as
another point solution that someone would have to go out and buy.

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Noah Kagan (Speaking)

How's the response from the customers been?

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Nate Matherson (Speaking)

It's been going quite well. We're still pretty early. Like I said, we're in our private beta. We've been working on positional for about 10 months,
but it's going fairly good. A lot of work for us to do.

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Noah Kagan (Speaking)

How do you know when you are ready to go public? And why not stay private if it's working?

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Nate Matherson (Speaking)

24:09

Right now, something that's limiting our growth is that I personally manually onboard every single customer. And so each week I might be doing 20 to 30 customer demo calls, and customers will actually say to me on those calls, I just wanted to sign up for your product from your website. I didn't want to talk to you. And so we're like very worried that we're losing out on this like large subset of potential customers who actually don't want to get on a demo and sales call with me. And so we are going to have like a typical sales motion at a certain price point, but
we definitely want to give people a product that they can self serve onto.

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Noah Kagan (Speaking)

And what's stopping us from doing that right now?

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Nate Matherson (Speaking)

Like we're kind of in the finishing stage of launching a self-serve flow, launching a knowledge base, launching onboarding, figuring out what pricing could be for a self-serve product. And so we're kind of in a sprint to March right now to do all the work we need to do
before we can launch the self-serve product.

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Noah Kagan (Speaking)

Nice, man.
Well, good luck.

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25:14

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Noah Kagan (Speaking)

25:47

I was just saying like the YC slogan, you know, do things that don't scale. I was even thinking about sharing the marketing playbook behind Million Dollar Weekend. And we had a beta launch team. Because my first goal with the book was to get a thousand reviews. Ideally good ones, but a thousand. And so having a very clear goal of the clear timeline which is seven days after the book launches you know very is definitely step one in an all-market step one is a great product then after that you know who's that person let's be clear on who I think the person is someone that dreams of having a business or you know side hustle but to get the thousand people which is my goal I was like huh you could do ads I could do all these things or I could literally just try to think about a thousand people who wanted to start businesses and manually email them myself. Right? Like I think people are overcomplicating the process sometimes and that's literally
not scalable because you know it's Sunday and I'm emailing people or I'm texting someone. That's also though the foundation that I do think builds you know very large businesses. Then the idea is like how can you scale the non scalable? So is there a way that manually you can have a bunch of other people do these onboardings. And I don't know, there's some beauty in that. There's some like craftsmanship of the manual work, of the connection, of the individuality. Like even with AppSumo, I would say
most of the first customers I still talk to this day, not every day, but I still know them. Not all of them, but a lot. And so I think that's lost sometimes where we're, and I'm not saying this is you guys, but we're rushing so fast to scale that we miss out on the foundation. And I think that creates
very strong foundations for the future.

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Nate Matherson (Speaking)

I agree. Our initial early customers have been very patient with us. We had customers sign up a week or two into building this. We moved very quickly into the sales process when we really didn't have much to sell. But a lot of people, especially early on, bought our product because of me. They know that I know a lot about SEO. They believed that Nate was going to build something that must be good and we'll be patient with him. And I do think even as the product has matured, me onboarding all of the customers manually, it builds a really high level of trust and it has created a really strong relationship
between me and a lot of our customers. And so I wouldn't trade the last 10 months of manually onboarding our customers for anything. I think it was super helpful for us in terms of making improvements to the product, building a strong relationship, also customer referrals. It's one of our top sources of new customers. I love that. So that's been great. So I wouldn't trade the last 10 months for anything,
but as I look ahead in terms of us wanting to grow faster, we're trying to figure out what can we scale? And we think that self-serve and replacing me as the break point in onboarding would help us do that a little bit faster.

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Noah Kagan (Speaking)

Yeah, there's this interesting SaaS marketing playbook that I think it's cookie cut and it doesn't always work. Like we built this product called sumo.com
and our customer, which was the AppSumo customer, which is a $20 a month email pop-up tool, and it crushed. I think we did six million ARR, and not I think we did in the first few years. And then you're like, okay, well, marketing playbook is you go mid-market and then you go have a sales team and you have SDRs and all this kind of stuff and because our churn is too high with these small businesses. And so to be said though, just knowing who the customer is and being comfortable with that and then, you know, maybe if you're a funded business, it does change the dynamic because you have an investor expecting a return. But you know, that business now we sold for less than $2 million last year and it's because we lost sight of who the customer is and we kind of try to follow I think what you see on Twitter as like, oh, well, you have to go big market to get bigger. And that's also just not the DNA of who we were, who we are. I don't know. I would, you should keep doing what you guys
are doing. I would just keep thinking, okay, what's working and how do I just do more of what's working, not change it. And I know that's, that's led me astray and I still get led astray at times, but I think a lot of my success is sticking with something that's working and keep doing it. Like here's a stupid example. It's freezing here in Austin, Texas, and you have to drip your water faucet, otherwise the pipes freeze. And so just one small drip last night into a bucket in my sink and this morning the buckets overflowing. And that's just like one small drip over and over and over and over. And I love that. I love that bucket because I'm like, yeah, that's how things can happen. If you just do a small thing for a very long period of time that
works, you keep doing it and doing and doing it. You have a flowing bucket.

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Nate Matherson (Speaking)

I love this example. I love that we have not stuck to the outline for the last 20 minutes. I think it's made for an interesting conversation so far. In your book, you say that most people just don't get fucking started. Why do people just not get fucking started?

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Noah Kagan (Speaking)

What do you think?

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Nate Matherson (Speaking)

30:17

I thought it was my podcast. I would argue that people who don't get started probably aren't make it if something is forcing them to get started. I think as entrepreneurs, at least the best entrepreneurs and other founders I know have this anxiety or feeling of uneasiness if they're not moving forward. And if they're at all stagnant in that moment in time, it just pains them. I would say maybe that people who just don't get started maybe shouldn't get started at all. That would be my initial reaction. But I'm curious to hear what you think.

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Noah Kagan (Speaking)

30:52

Most people haven't got started because they're afraid of what could actually happen for them and it's easier to feel safe. Right, I do believe in life there's like 10, 80, you know, 80, 20, but it's really 10, 80, 10. And what that means is that most people just kind of accept that's where they are, they're in middle class and that's where they're supposed to stay. Lower 10 just give up completely. And then some of the 10, the top 10, I would say like, hey, maybe I can do something. And they don't get started because they're afraid and they think they're not ready. And then most people don't realize they're a lot better than they even realize. They are a lot better than they expect to themselves. We all are.
But to get to this destination that I think people are excited to live their own lives, they think they have to prepare more. They have to watch more videos. They have to buy more tools. They have to go to schools and all these things when that's not necessarily always the case. And what I've noticed in success for myself and others and what I admire is that by getting started, let's even take Positional, you guys got started, maybe you won't end up where you began, but at least you got going and you'll get some learning and confidence
as you progress. And so how do we encourage people to just get started? Because that's one of the things they're not acknowledging is actually holding them back from getting where they want to go. And there's this big misconception, Nate, where people want to be millionaires or multimillionaires or even just houndredthousandaires. And they're like, man, I'd love to have, you know, Noah's life. Maybe, maybe not. But that also just started with me making $12 one Saturday. And they do is they create this big, scary, like, oh, well, I, you know, it's going to do all, it's going to take all this work to get to that point. And it's like, no, it can
be fun. And you can actually do it in a quick period of time. And guess what? That'll build a lot of confidence because all of us have been scared of doing something in our lives. Maybe it's swimming, maybe it's dating. And a lot of times I do think it's business. And I found that by getting started in business, like even this book, and then getting going with it, and then finally getting into it, and having seen some early validation with it, it's like, oh, maybe it's not as scary as I thought. But you'll never learn that by just sitting outside the pool. But that's my part about just getting started in business, right? So, take AppSummo.com, to validate that something is wanted very quickly. And yes,
you can have a plan. But then also understand, like, is there deviations from that plan that are working even better. So we did bundles of software to begin with. That was our reel for the first year. And then Andrew Chen, who's one of my best friends, we put together a one-minute business model, which you saw in the book. He's like, hey, if you take stuff in bundles
and you did individual deals, you can do four X more product launches a month and you can get more margin per product and then you can actually run ads because you're selling for more time so that can potentially create a better return for you on the spend. And then we went to only daily deals.
And then Ullman and Amon were like, hey we're doing these one year deals, why don't we try five year? And then it was like, well okay, why don't we try lifetime? Now there's only lifetime. And so I do think it's having a plan, but I would say a lot of our success
with marketing and with AppSumo and with all these things is recognizing the thing that's working and really honing in just on that.

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Nate Matherson (Speaking)

33:35

The theme of this episode, it might be like throw away the outline and just jump into it and get started.

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Noah Kagan (Speaking)

33:41

That's a great idea.

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Nate Matherson (Speaking)

33:42

I mentioned that the lightning round would be like three to five questions, but I've got I think a running list of like 10 lightning round questions that we're going to get to.

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Noah Kagan (Speaking)

33:51

Dude, let's hit it, dude. Follow the outline. If you deviate one thing from this outline, Nate, I'm gonna drop out of the show and just leave.

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Lightning question round:

Nate Matherson (Speaking)

You mentioned money and like having earned money. Does having more money make you more happy?

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Noah Kagan (Speaking)

34:03
Yes, 100%.

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Nate Matherson (Speaking) 

Why?

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Noah Kagan (Speaking)

I'll tell you. So this morning, I was on my $6,000 toilet and I am so, I think about this toilet every day. I can't, I look, when I travel, that's what I miss.

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Nate Matherson (Speaking)

What does the toilet do?

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Noah Kagan (Speaking)

What does it not do is the better question.

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Nate Matherson (Speaking)

34:17

So it's like a heated, like it heats, it cools, it does anything you'd want?

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Noah Kagan (Speaking)

34:21

Heat is like, that's the junior version, dude. No, it's got like, it's got a remote, it's got his and her remote, so my girlfriend can have her settings. It pulsates, it dries, it has a white noise, so people outside don't know what's going on in there. It's got a light, so if you get a little lost in the dark, it's like, hey, I'm here, I'm thinking about you. Don't fall in me. It self-cleans. Dude, this is just the basics of being rich, but I think the bigger concept of being rich is one, you could be a time millionaire, which is more affordable than actually having it's a lot cheaper than becoming a millionaire. I call it in the book freedom number, which is find the thing you you make enough money to do so you can live the life you want. And I've actually noticed in my career, doing that will lead you to
make a lot of money, just finding the thing you're enjoying doing every day. And you do it just like the bucket for a long period of time. Having money is is is the best. What I'd like to say is it's just like having a six-pack, at least get it. And then if you don't like having a six-pack, just go back to your body, your regular body. So at least get rich, and then you could decide, hey I don't like being rich, fine give it away and just go back to where you were but at least have that option which it is available to everyone, it's not just a funded Silicon Valley companies. And so for me having money now and enjoying it, not just, I've always, I've had it for a while now but enjoying
it, I would say one, it's nice not to ever budget. Someone asked me two weeks ago like, oh do you have a retirement plan? I was like, No, my I don't ever even have to worry about having enough money for retirement. I don't want to have to think even think about it. And it's really like what's your net worth? I'm like, I don't I'm not focused on net worth. I'm just like making up money. You never have to worry about money. And having that option available is it's very liberating so that I don't have to have family drama because of money and that we can my girlfriend needed doesn't have to work if she doesn't have to. We don't ever work again. And doesn't mean I love my work. I'm working harder now, which is crazy
I'm richer better-looking But I'm working harder now than I ever have and I'm just liking the work I get to do It's really really fun And I would say my 20s I was I wasn't really making any money and I was hating a lot of the work and I was really angry and bitter about all this stuff. I was like, I got to get rich I got to get I got to prove myself to others and as we get older We just have to prove ourselves to ourselves and that is what million-dollar weekends about it's like let me let me see what I can do. And yeah, money is great. You can have a toilet. And I was raised Jewish where, you know, materialism can be bad and you should be practical. And it's nice that there's a flight that's 5,000. I live half the year in Spain. It's like, it's a $5,000 first class ticket. And I was like, wow, that's like a bike, that's a car, that's a monthly salary. It's nice that I don't have to worry as much about that. And so just having that option available, I would encourage everyone.
And to be clear, I didn't have money in the beginning. In 2010, maybe I had a million dollars cash because I saved up and I lived really cheap, super cheap. And that was just mostly day jobs. But over time, like, and I got started over time, you know, I made 40,000, then I made 70,000, I made 120,000, and now every year I make seven figures. But that also doesn't, that didn't start initially.
I had to get started and then I had to stick with it. And many years later now, it's paying that dividend.

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Nate Matherson (Speaking)

37:15

How many hours a week would you say that you work?

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Noah Kagan (Speaking)

37:18

I tend to encourage people to think about the outputs of their week, than necessarily the hours in the week. Right, like if you worked one hour, but you did something insanely valuable, that's enough. With this book launch, so I have a book launch, I have a girlfriend who's pregnant, that's my number one priority.

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Nate Matherson (Speaking)

37:32

Congrats.

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Noah Kagan (Speaking)

37:33

Thank you, man. AppSumo.com, and then we have a YouTube channel. It's a lot. So yesterday, in general, Monday, what was it so it looks like I started at 9, and then I had meetings or work or activities pretty much non-stop until 8. Today I started with you at 9:30 I had a sleep in because I'm not feeling well and then I have meetings or work till around 6 non-stop it's not sustainable and that's okay because that's just for now but to me success is how do you create a calendar you actually enjoy so normally when there's not a book launch I don't work before noon or I have that option available
so nothing is scheduled before noon What's more fascinating especially where they're starting but when you're starting you kind of just have to go work your ass off I would say and it should be fun But you have to get it going you have to get momentum you have to get the train off the tracks But over time what's more interesting to me is sustainability How do you be a drop in a bucket for 10 years and then you know, there's compounded interest I think the more interesting is compounded business or you just like keep doing this thing over and over and you keep getting a little bit better but in a slow gradual progression.

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Nate Matherson (Speaking)

38:29

Is it a boy or a girl?

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Noah Kagan (Speaking)

38:30

It's a little Noah. It's going to be a little boy, which is I feel very blessed to be able to have that opportunity.

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Nate Matherson (Speaking)

38:37

Well, kids are great and all. I don't have any children, but I imagine they're great. But if you were to buy a racehorse.

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Noah Kagan (Speaking)

How much are these racehorses, dude?

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Nate Matherson (Speaking)

You know, for a good one, like one that like has a serious shot, like kind of out of the womb to win the Derby, you might be talking like half a million bucks. But we look back, there was California Chrome who won a couple of legs with a triple crown a few years back, and I think they purchased him for like 12 grand. So it doesn't necessarily need to be a $500,000 horse, and maybe there's like life meaning to that. I don't know. We can talk about that on another episode. But if you did buy a horse and that horse was coming around the final turn, you were about to win the derby, what would you have named that racehorse? What would you want the announcer shouting as it crosses the finish line?

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Noah Kagan (Speaking)

Good Price. Yeah, I'd call it Good Price.

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Nate Matherson (Speaking)

Good Price, that's such a good name. Is Zuckerberg a good or a bad dude?

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Noah Kagan (Speaking)

Good.

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Nate Matherson (Speaking)

What's one company you'd love to have on AppSumo.com?

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Noah Kagan (Speaking)

Clean Shot. It's a screen-sharing tool. We actually have them now for free on AppSumo. We bought, I think, 2,000 licenses to give out as a marketing tactic.

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Nate Matherson (Speaking)

What channel, in terms of customer acquisition, are you most excited about in the year ahead? 

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Noah Kagan (Speaking)

Our originalist products.
So tidycal.com, we have that document signing tool that's coming out on February 19th. So we build low-cost alternatives to popular products that have word of mouth built into them. So TidyCal, SendFoxToCom is email, KingSumo is giveaways, and then the new document signing tool, which we don't even have a name for.

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Nate Matherson (Speaking)

40:02

Some people have said DocuSign has a network effect. And I know that you're launching a new competitor to DocuSign. Does DocuSign have a network effect that you'd be concerned about?

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Noah Kagan (Speaking)

40:13

Probably in certain industries, but it's not the industries I'm interested in. So I'm interested in solopreneurs, freelancers, and startups like yourself. I called and contacted people to understand if there was a network effect. Because I will tell you,
I've done other businesses like email, where we built a Klaviyo competitor and I begged friends and they wouldn't switch off. And then even sendfox.com, which is a MailChimp competitor, it's done very well, it still does maybe $2,000 a day in profit, but it's very hard to get someone to switch email, very, very hard. With DocuSign, people use it very infrequently,
is what I've noticed, and unless you have a lot of templates or a lot of customization, it's not a hard sell. It's the same reason our tidycal.com product is crushing. I mean, that's doing $3,000 a day in profit, and it's because we have a one-click import from Calendly, which doesn't even really matter, and it takes two seconds to set up, so it's not a big switching cost.

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Nate Matherson (Speaking)

41:02

How do you think about exits?
Should entrepreneurs plan to sell?

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Noah Kagan (Speaking)

I've really struggled with that. I always wanted a company that I didn't have to exit from, and I like what I do. I think the exit, though, it really creates the wrong incentives a lot of the time. And it's like, well, what's really best for you and your business and your customers? And then does an exit do that? And then maybe, yes, that's an exit because exit could be good if you're old and you don't have a succession plan. Or an exit could be good because you need capital and you go public, you have that opportunity now to pay a lot more for people. But I think it's person-dependent.
I've never really wanted to exit. I'll be straight, but if someone said, hey, it's a billion dollars, like, yeah, I'm out. Like, no hesitation, but if it's $100 million, it is good, but can I really change everyone in the team's lives? Like, I have more than enough money for myself, so would the team really get changed at $100 million? Probably not.
And so, it needs to be a number, yeah, where the team would really be able to all receive enough to ideally keep working at AppSumo, because they like it, or do other things.

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Nate Matherson (Speaking)

41:56

Why should entrepreneurs buy the book The Million Dollar Weekend?

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Noah Kagan (Speaking)

42:00

I don't like telling people to buy the book. I think, you know, look at where I'm at, right? I've worked at Facebook, I helped start mint.com. I've done a bunch of businesses. You can see all my businesses, TidyCal, SendFox, AppSumo.com. You can see the YouTube channel. And if you're curious or you want to replicate that,
this is the book.

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Nate Matherson (Speaking)

42:18

Well, we will include a link to buy the book in the show notes. Noah, thank you so much for coming on. This was so much fun. We threw the outline out the window and there's probably some life meaning to that as we discussed. But yeah, this was so much fun for me. Thank you so much for coming onto the Optimize Podcast.

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Noah Kagan (Speaking)

Thanks for having me, guys.

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Ad Spot:

42:40

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We've got about eight tools and we'd love for you to check them all out at positional.com.

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