AppSumo Made $80M in Revenue in 2023; What Insights Does the Founder Have for Budding Entrepreneurs?
Noah Kagan, the founder of AppSumo, acted wisely and built the online marketplace from scratch in 2010. In 2023, the company reported a revenue of $80 million. Kagan's idea was inspired by MacHeist, a site that offers discounted app bundles for Mac users as well as PCs. At the time, Kagan emailed the founder of Imgur, which is an image-sharing service available on Reddit. He offered to promote a discounted version of the software in exchange for a percentage of what he sold. He later contacted Reddit's founding engineer to ask if he could advertise the deal on the site. Reddit's founding engineer loved the idea. "Why not?" the Reddit engineer told Kagan. "Our users love Imgur. They’ll be thrilled to get a discount," via CNBC Make It.
He then paid a developer back in Pakistan $48 to build a website with a PayPal button and spent $12 on a domain name. One decision, $60, and a few phone calls later, he was all set to start operating. He made it big and is now the author of "Million Dollar Weekend" which provides valuable insights for budding entrepreneurs. Kagan recommends a few things to people who are looking to start their businesses.
The first thing that he asks everybody to do is to start the process. He says that while building your expertise and doing your research is important, it's also essential to understand when to start. "You’ve got to start today. You can’t keep watching videos," he says. This means that if you already have a solid idea then the best thing to do is to, "take action first, get real feedback, and learn from that" because it is much more valuable and quicker than any book or course.
Secondly, Kagan asks aspiring entrepreneurs to practice their skill of asking."You have to practice the skill of asking," Kagan says. "Asking someone to be your customer, asking someone to be your partner, asking someone for feedback on your idea." He says that most times people are intimidated by the idea of rejection. He goes on to talk about how all the rejections that he has seen in his life did not matter ultimately in the grand scheme of life. "This is going to suck. Let me aim to get at least 20 rejections," he says he tells himself. "That alone helps me accept that I will get rejected and turn it more into a game versus a blow to my self-worth."
Kagan also talks about how problem-solving can pay off. He urges aspiring entrepreneurs to look for a prevalent problem and see if people are willing to pay for the solution to that problem. "The most important thing is that you’re solving a problem, people are excited to give you money for," Kagan says. “You have to find a thing."
He says that sometimes this may lead to things that may not work. He says that his mishaps included his foray into online gambling. However, you have to keep going to finally find something that works, he says, and talks about the time when his company started offering discounted alternatives to popular software solutions. "I asked people if they were interested in a DocuSign alternative," he says. "I did $3,000 in 24 hours." "The best business is the one that works,” he says. “I started three other businesses that did similar things. And when I finally canceled those and focused on the one that worked, that’s when my business took off."