Noah Kagan built AppSumo to a $100M business in 10 Years.

But, it all started after multiple attempts & one breakthrough $12 sale.

Here are 10 key lessons from Noah’s 0 to $1 Million phase:

#1: Quit What Doesn’t Fulfil You

Noah was actually working on his own startup, Gambit, focused on payments for Facebook games.

But he felt very unfulfilled.

He didn't enjoy his partners or the daily operations.

So, he quit his own company.

He took another job to sustain himself.

This job paid him $5,000 & gave him the freedom to chase his true passions.

#2: Identify What You Love and Where There’s a Need

Noah enjoyed promoting products.

He loved blogging, organising conferences, and meeting people.

He saw software creators continuously struggled with marketing.

Realising he could help them and do what he loved, he chose to tackle this problem.

He set out to help software creators gain more customers.

This alignment of passion and market need was key.

#3: Embrace Rapid Failure & Keep Pivoting

His first solution, SoftwareTaco - a site for software reviews, flopped.

His second solution, RewardLevel - a site to trade customers, flopped.

Despite the setbacks, he didn't give up.

He kept pushing forward, learning from each failure.

This eventually led him to MacHeist.

#4: Adapt Existing Ideas Where There Is Traction + Put Yourself Out There

MacHeist was a website that sold bundled software deals for Mac users.

Inspired by this, Kagan created AppSumo.

He wanted to follow a similar business model but for web-apps.

He cold-emailed the founder of Imgur, & negotiated a deal: for every pro version of Imgur that normally cost $24, Noah asked if could resell it at any price and simply share a cut of $7 per sale.

With no cost or risk for Imgur, only potential gains, the founder agreed.

#5: Work Backwards from Where the Customers Are

For the Imgur deal, Noah knew Imgur’s main users were on Reddit, so he posted the offer there.

Within the first week, he sold 200 codes at $12 each, generating $2,400.

This idea just gained some legs.

By working backwards from where the customers were, he was able to reach them effectively & validate his idea.

#6: Rinse & Repeat What Is Working + Leverage Existing Popular Platforms

With the success of Imgur, Noah turned to repeating this but for other web-apps.

Noah identified the most popular software being discussed on Lifehacker, a very big blog at the time.

He reached out to Evernote & TimeDoctor with a similar Imgur offer.

Both said yes.

He also asked them to promote it to their own audiences; sharing the marketing materials to do so, resulting in free marketing for AppSumo.

And Lifehacker wrote an article about AppSumo's bundle offer.

Sales of 1000 codes at $50 each flooded in, generating $50,000.

This showed the power of tapping into established audiences.

It was a smart way to reach potential customers quickly.

Getting featured on reputable sites like Lifehacker provided validation & built trust with customers.

#7: Getting Even More Clear on Who Were The Exact Customers

Noah knew that successful businesses solve real problems.

He got super clear about his exact customers & purpose: helping smaller software creators get customers, who wanted to be helped.

His initial success with the Imgur deal proved he was addressing a real problem.

This customer-centric approach was crucial, as it ensured that he was providing a solution that customers were excited to pay for.

By the end of AppSumo's first year, it had made $300,000.

#8: Focus on Growing Your Email List, Not Just Revenue

Ask yourself: within your own business what's the number that actually matters?

For Noah, this wasn't immediate revenue for AppSumo, but building a substantial email list.

By focusing on growing the email list, AppSumo ensured a steady stream of potential customers who could be marketed to repeatedly as they sourced more deals.

#9: Hitting The 1M Mark Through Leveraged Events

AppSumo's big breakthrough came when it partnered with individuals like Eric Ries & upcoming companies like Twilio & SendGrid for the South by Southwest (SXSW) 2011 Lean Startup Bundle.

They sold 10,000 bundles for $99.

And this propelled AppSumo to the $1 million mark in revenue!

#10: Do the Work Yourself to Understand Your Business Deeply

Finally, during this stage, Noah managed all aspects of the business himself.

He handled support, programming, sales, and marketing.

This hands-on approach gave him deep insights.

It helped him understand every part of his business.

Kagan's personal touch ensured he knew exactly what his business needed to grow.

And that's it! If you enjoyed this, reshare to help someone else learn Noah's lessons from 0-$1M.

And if you want to see more, follow me → @laytalksco & subscribe to: https://laytalksco.substack.com/subscribe

I write daily threads like this on the software industry, business models, and growth strategies of the 1% as part of #ship30for30 & #buildinpublic

10 Key Lessons from How Noah Kagan Took AppSumo from 0 to $1 Million

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