Noah Kagan shares how he began AppSumo, the “Groupon for software,” in a single weekend on a latest podcast episode. It cost $60 to start; AppSumo made $80 million last 12 months, and Kagan is still its CEO.
In 2010, Kagan was 28 years old and already had the experience of being the thirtieth worker at Facebook and the fourth person to work at the personal finance app Mint.
“I think I just felt unsafe in some of those places,” Kagan told fellow entrepreneur Jeff Berman on a June episode of “Masters of scale“podcast.
Kagan was fired after nine months at Facebook by Mark Zuckerberg, and later by Mint as well. He realized that taking the time to do his day job got here with risks—one other person could determine to fire him at any moment.
“I think I wanted to prove that I used to be smart, prove that I used to be successful, or prove that Facebook, when it fired me, and then when Mint fired me, [that] “I can do it,” Kagan said.
The idea for AppSumo, a marketplace for software deals for small business owners or sole proprietors, got here about when Kagan thought there was a way to promote software tools and get paid for doing so. He noticed that the MacHeist website offered discounts on software bundles to Apple users and wanted to try to make the same kind of discounts available to a wider audience.
“My goal was to empower geniuses to create software, and my skill and passion was to advance,” Kagain said.
The business was born in about 60 hours. First, Kagan found software he wanted to sell: the image-sharing service Imgur. He cold-emailed Imgur’s founder on Reddit and got permission to sell a discounted version in exchange for a cut of sales.
The next step was to meet with Reddit’s founding engineer to ask for free promoting, which he got.
The final part was paying the developer to create a website with a PayPal button and purchasing the AppSumo.com domain.
What was the total cost of starting the company? $60 and one weekend of his time.
AppSumo made $300,000 in its first 12 months and $3 million in its second 12 months, Kagan said on the podcast. Last 12 months, it brought in $80 million in revenue.
Kagan’s net value is currently $36 million.
Kagan said a key part of business is investing in and getting excited about a problem.
“I think that’s what business people are missing a little bit,” Kagan said. “They’re chasing AI now or they’re chasing influence. I think find the areas [where] you say to yourself: I don’t know if I’ll ever get bored of this.
Starting a side business or finding an additional source of income has its benefits — according to Kagan, you have more control over your future.
“If you can only dedicate 30 minutes a week, if you can only dedicate one Netflix show a week, if you can only dedicate one thing a week and you do it consistently every week, you can eventually have this business,” he said.