The Tim Ferriss Show
#717: Noah Kagan — How to Launch a Million-Dollar Business This Weekend
Episode guests
Podcast summary created with Snipd AI
Quick takeaways
- AppSumo.com tracks daily metrics like gross sales and net revenue to stay on track towards their annual goal.
- AppSumo.com emphasizes the significance of having one singular goal, learned from Zuckerberg.
- AppSumo.com evaluates their progress and makes necessary adjustments to strategies based on daily metrics and goals.
- The early stages of a career require hard work, problem-solving, and resourcefulness.
- Success can lead to a feeling of being stuck in maintaining and running a business.
- Validating a business idea can be done through targeted ads or leveraging existing marketplaces.
Deep dives
Daily Metrics and Growth
At AppSumo.com, there is a daily poll that tracks key metrics such as gross sales, net revenue, average order value, and new buyer conversion rate. These numbers are automatically posted using automation tools like Zapier and Snowflake, giving real-time insights into the company's performance.
Annual Revenue Goal
AppSumo.com's main goal for the year is to achieve $45 million in net revenue, with gross sales expected to be around $77-80 million. By tracking these daily metrics, the company can stay on track towards their annual goal and make data-driven decisions.
Importance of Having Singular Goal
Following the lessons learned from Zuckerberg, AppSumo.com emphasizes the significance of having one singular goal. This simplifies the focus and aligns the team towards achieving the desired outcome.
Track Progress and Adjust Strategies
By reviewing the daily metrics and comparing them to the goals, AppSumo.com can evaluate their progress and make necessary adjustments to their strategies. This data-driven approach helps the company stay agile and optimize their performance.
Early Efforts and Uncertainty
In the early stages of his career, the speaker reminisces about the hunger and uncertainty he experienced. He recalls the hard work, the problems he had to solve, and the resourcefulness required to make things happen. He acknowledges the excitement of those formative moments and the sense of accomplishment they brought.
The Car Caught, Now What?
Having achieved a level of success, the speaker reflects on the feeling of catching the car they were chasing. They now find themselves in a position of stability and comfort, but also a sense of being stuck in maintaining and running the machine they've built. They question if this is the ultimate goal they were striving for.
Transition and Reevaluation
The speaker shares their transitional phase where they question their pursuits and evaluate whether they still enjoy what they do. They examine the evolving landscape and wonder if their current pursuits, like YouTube, hold the same differentiation and competitive advantage they once had. They also contemplate the diminishing half-life of fame and the potential pitfalls of relying on platform-dependent audiences. They express a desire to step back, reevaluate their direction, and not rush into committing to trends.
Creating a Million-Dollar Golf Trip Business in a Weekend
Jake, who loves golf, wanted to start a business in the golf industry. By following the one-minute revenue, cost, and profit model, Jake determined that he could make a million dollars by arranging high-end golf trips. He created a Google Doc with an offer and called his golfing friends to gauge their interest. By pre-selling the trips, Jake received five deposits within 48 hours, ensuring a successful start to his business venture.
Overcoming Fear of Starting and Asking for Feedback
Prior to starting the business, Jake was afraid to start and had a fear of asking for feedback. However, by practicing the dollar challenge and coffee challenge, he realized that starting and asking were not as difficult as he thought. He called his brother and golfing friends seeking their feedback and offering them the opportunity to make a deposit for the golf trips. By facing his fear and taking action, Jake gained momentum in his business journey.
Keeping Focus and Avoiding Distractions
Jake made the common mistake of getting distracted by new ideas while already in the process of successfully pre-selling his golf trips. He wanted to start an app based on an idea one of his customers mentioned. However, he was reminded to stay focused and deliver on what he had already promised. Avoiding distractions and over-delivering on his existing business model ensured Jake's success in the golf trip industry.
Validating Business Ideas Through Ads and Landing Pages
One effective way to validate a business idea is by creating ads and landing pages to gauge interest and potential customer response. By running targeted ads and monitoring the conversion rates on the landing page, entrepreneurs can determine if there is genuine demand for their product or service. This method, popularized by Tim Ferriss, allows businesses to test the market without significant upfront investment. An example of a successful implementation of this strategy is Kettle and Fire, a bone broth company that started by running bone broth ads and tracking conversions on their landing page, leading to a $100 million business.
Leveraging Existing Marketplaces for Validation
Another effective way to validate a business idea is by leveraging existing marketplaces where people are already spending money. Marketplaces such as Etsy, Craigslist, Facebook, or Amazon provide opportunities to test the demand for a product or service. Entrepreneurs can list their product or service on these platforms, even if it's just a mock-up or prototype, and analyze the response from potential customers. This approach allows them to gauge interest, receive inquiries, or even secure sales, providing valuable validation for the business idea.
Low Cost Validation Through Local Listings
Entrepreneurs can also employ low-cost validation methods by creating local listings on platforms like Craigslist or other local classified websites. This approach is particularly useful for service-based businesses or rentals. For instance, someone interested in starting a camera equipment rental business can create a listing offering camera and equipment rentals in their local area. The level of response, inquiries, or bookings they receive from potential customers can serve as a validation for the feasibility and demand of their business idea.
The 48-Hour Challenge to Change Your Life
Noah Kagan introduces the 48-Hour Challenge, urging listeners to take action and make a significant impact in their lives within 48 hours. The challenge invites participants to start a business, or if they already have one, to make a substantial change or improvement. Participants must leave a comment on Tim's blog post about the episode and use the hashtag #48HourChallenge. The selected winner will receive an all-inclusive paid trip to spend 24 hours with Noah, receiving invaluable guidance and support for their business.
Lessons from Spending Over a Million Dollars on Coaching
Noah Kagan shares his experiences and insights gained from working with various coaches in different areas of his life. He emphasizes the importance of finding specific coaches who can address specific weaknesses or areas for improvement. Noah discusses the benefits of having a CEO coach, business coach, marketing coach, and other specialized coaches. These coaches provide valuable perspectives, challenge thinking, and hold him accountable, ultimately contributing to personal and professional growth.
Making the Most of Inputs and Advice
Noah Kagan discusses how to navigate and prioritize the multiple inputs and advice that can come from coaches, mentors, and advisors. He advises focusing on the inputs that align with your priorities and specific problems, seeking coaches who have experience in the areas where you need guidance. Noah highlights the importance of recording coaching calls and re-listening to them to better absorb and act on the advice received.
Brought to you by LinkedIn Jobs recruitment platform with 1B+ users; Eight Sleep’s Pod Cover sleeping solution for dynamic cooling and heating; and Shopify global commerce platform, providing tools to start, grow, market, and manage a retail business.
Noah Kagan (@noahkagan) was #30 at Facebook, #4 at Mint, and has since created seven million-dollar businesses (Kickflip/Gambit, AppSumo, KingSumo, SendFox, Sumo, TidyCal, and Monthly1k).
He is the CEO of AppSumo.com, the #1 software-deals site for entrepreneurs, and has a popular YouTube channel, Noah Kagan.
His new book is Million Dollar Weekend: The Surprisingly Simple Way to Launch a 7-Figure Business in 48 Hours.
Please enjoy!
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The blog post for this episode: https://tim.blog/2024/01/23/noah-kagan-million-dollar-weekend/
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This episode is also brought to you by LinkedIn Jobs. Whether you are looking to hire now for a critical role or thinking about needs that you may have in the future, LinkedIn Jobs can help. LinkedIn screens candidates for the hard and soft skills you’re looking for and puts your job in front of candidates looking for job opportunities that match what you have to offer.
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[00:00] Start
[03:55] Noah and some of his notable successes.
[07:00] Is Barcelona the new Austin?
[13:43] Navigating the legal hurdles to living/working in another country.
[17:44] Running an $80 million business.
[20:41] Noah’s negotiating basics.
[24:33] The chargeback maneuver.
[27:02] WIIFT (What’s In It For Them?)
[29:54] A recap of the coffee challenge.
[31:31] “Life punishes the vague wish and rewards the specific ask.”
[34:12] Other comfort challenges Noah recommends.
[39:12] Feedback is a gift.
[42:26] When comfort challenges aren’t appropriate.
[45:33] LOT (Listen, Options, Transition).
[46:59] Tracking metrics that matter.
[52:17] T3 B3 (Top Three, Bottom Three).
[59:46] Weekly reviews.
[1:02:42] The value of unambitious goals.
[1:06:51] Regrets of billionaires.
[1:13:32] My approach to book launches: then and now.
[1:26:50] Priorities: then and now.
[1:43:19] Finding a sustainable purpose.
[1:49:42] Do I still find my past work useful today?
[1:52:44] Testing the waters with new hires.
[1:55:22] Don’t forget to look in the rear-view mirror sometimes.
[1:56:23] Why should you trust Noah’s advice in Million Dollar Weekend?
[1:59:47] Now, not how.
[2:03:18] What’s your freedom number?
[2:03:59] Getting your ask in gear.
[2:05:09] Counterintuitively, constraints catalyze creativity.
[2:08:17] Turning annoyance into opportunity.
[2:11:21] Determining if your intended market has value.
[2:14:12] Most profitable, elegant businesses are simple at their core.
[2:14:57] Entrepreneurs rise from the ashes of fired employees.
[2:17:14] Why you should start a podcast or business.
[2:18:18] “No solutions, only trade-offs.”
[2:19:01] Putting the idea to the test.
[2:22:52] Are you making this harder than it needs to be?
[2:24:09] The Dream 10 as a test for market viability — and your commitment.
[2:27:07] Rejection as teacher.
[2:27:58] Deliver on promises before worrying about scaling up.
[2:32:01] The three Ws: what, who, and where?
[2:33:04] The AppSumo origin story.
[2:36:24] Early high-touch community building and scaling considerations.
[2:38:29] The BrainQUICKENing.
[2:42:43] Finding underserved opportunities.
[2:44:48] Initiate correspondence with humility.
[2:48:12] Little ask, big ask.
[2:48:56] How do I handle rejection?
[2:51:18] Revisiting the Law of Category.
[2:56:16] How Noah handled a recent rejection.
[2:57:28] Dating circa now and learning optimism.
[2:59:18] How Pat seized opportunity in Poland.
[3:00:36] Free work?
[3:04:35] Behind the scenes of my Opening the Kimono event.
[3:12:02] Making sponsorship deals win/win.
[3:15:47] Streamlining business idea validation.
[3:19:42] Unorthodox simplicity.
[3:22:02] Better to be chased for money than chasing it.
[3:23:45] Best holiday purchases for under $50.
[3:31:28] Is competing for attention on YouTube worth my time and sanity?
[3:39:55] Low-effort, high-reward YouTube experiments.
[3:45:21] Lessons learned from spending more than a million dollars on coaching.
[3:53:01] Benefits of the board.
[3:53:35] How to take on the 48-hour challenge.
[3:56:00] What’s the DEAL with Cindy 10 years after meeting Noah and me?
[4:00:34] Parting thoughts.
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