A Poolside Chat With Noah Kagan - Part 1

A few weeks ago, we sat down and talked with legendary taco connoisseur and entrepreneur Noah Kagan. He’s better known for the latter…

Noah was employee No. 30 at Facebook, employee No. 4 at Mint.com, and now runs AppSumo – which is the gold standard in software deals in marketing circles.

His YouTube channel also just passed 100K subscribers – he’s pretty much a certified YouTuber now. So, where to begin? 

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So in addition to running AppSumo, you’re basically a YouTuber now. What makes you think that YouTube is the way to go?

I think that almost the hardest question for every single person’s life is how to spend our time. That’s like the world. 

I never really thought of it that way. But that is really the hardest question in the world. Like, how should you spend this next 30 minutes? And should it be talking to me? Should it be going on dates? Should it be sitting in silence? And I think we all have to figure out that question, and over time it changes to. 

So, for me, I always struggled with wanting attention, but felt like that wasn’t a respectable career. Like all these people that are like bloggers or authors or YouTubers or content creators, I was like, I really respect YouTube – the guys who make the software, not the schmoes that are, you know, “Hey, what’s up, let me make a video.” 

And I struggled with that for a very long time. 

Because I grew up in Silicon Valley, I admired Zuckerberg and Gates and Jobs and all these things, but eventually, I got to the point where I figured out I just love it. I love content, creating, I love sharing things I love. I think I’m an evangelist, and I try to evangelize amazing stuff. 

So: Why YouTube? I think of it as a marketing channel. I think it is the only channel I’ve seen where you can really reach an audience controllably at scale, and the quality of the audience is exceptional. 

So I love marketing, I think there’ll be new media, like everyone’s got all their dicks all hard for Clubhouse. I don’t know about the quality of that. I think the audience is high. It reminds me of Quora, when everyone was like, oh my God, I gotta get Quora followers. No one talks about that anymore at all. There’s opportunity when you do new channels and stuff like that. 

I’ve tried a lot of these. I’ve tried blogging during the 20 years I’ve done podcasts. YouTube is the only channel I’ve ever seen that I can reach a large audience for free. And the type of people that I’m reaching are amazing. If there was a better channel, I would do it. I think people are really stupid about podcasts. I think most podcasts really don’t grow. And the reason I say that is because I did a podcast for four years. And the audience in four years hasn’t grown. It doesn’t mean they’re not awesome. And I don’t like them just as a marketing activity. I can get a better squeeze out of the YouTube activity. The only other channel that matters, I think, is email.

*The Crew strongly agrees*

I think the other thing to consider is, I’ll give you the parallel: What can I do that will make AppSumo a bigger company?

Because I think AppSumo helps a lot of entrepreneurs out. So, what else could I do that would help expand the business? And I think YouTube is the only channel I think can work. I can 10X the brand by just making more videos – so your newsletter, like if you were to grow Stacked Marketer, you can do the referral ambassador thing, paid acquisition, affiliates, blogging, TikTok, all the different things.

Ultimately, which one is really able to expand the pie of my audience? And yeah, YouTube is just unbelievable. I still think YouTube is just beginning. I think Instagram is dying. I think WhatsApp is dying. I think with TikTok, the quality of the audience sucks. I think you’re there to get entertained, get your dick off and that’s it and then I think with YouTube you’re like: Holy shit. Like I’m here to learn some fascinating things I’m not you know, podcasts purchases, like for the committed diehard fans, but YouTube is like how you get interested and exposed to becoming a fan. So, I think you guys are there’s a huge opportunity around it as well.

But I think one of the number one things that marketers make mistakes on is that they don’t stop doing things that aren’t working. That includes AppSumo. 

AppSumo has an Instagram account. And I am telling them for like, I think months now, that I think it’s really stupid that we keep posting on Instagram. They’re like: But it’s our brand! I’m like, there’s no one there for us. Let’s put all that money and time and our people’s energy into YouTube or something else. 

And as a marketer, it’s very hard to give up. But the marketing of companies and the business I’ve seen do very well, besides number one, having a great product is figuring out what marketing to really go further on. So, I think it’s great that you’re not doing YouTube. And hopefully you have other marketing that you’re like: Oh, this is working.

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Back in 2020, you gave away a Tesla. How did that go?

I’ll tell you the numbers.

We spent $80,000 on the Tesla giveaway, including the car, we paid $10,000 for a company to facilitate the giveaway. And then we had a bunch of other prizes. 

Now we’re two months later. We’ve made back $95,000. Revenue, not profit. You always need to ask the number. I don’t know what the margins are on that. But my guess is by the end of 12 months, we’ll make our money back. So that’s kind of debatable for different businesses. I thought it got good buzz. I thought it got a lot of people talking about us. And so, is that worth it? Is it worth it? 

We’re actually gonna start doing these mega giveaways every quarter. And then I’d like to do them every month. I think one of our keys to success is we find stuff that works. And we go insane on it. Like, absolutely insane.

Our approach is try something out on a small scale. And if it shows promise, then go berserk. And you don’t have to have a lot of money, like even these giveaways, you can find other people to front the cash. Or you can try to split the money with other groups and be creative with it. 

We started out with the first giveaway that exploded. Honestly, the giveaway that probably put $10 million into the company was our Dropbox for life giveaway. And so we launched that in 2013 or something. And that’s only $100 a year for probably eight years. Right? So it’s actually only $1,000. 

It’s spread over eight years, but that probably put $10 million in the business. And since that time period, I think you can wait for the results. But really, it’s how you test something on a small level, see if it works, and then if it’s showing promise then going crazy. I think too many people don’t. 

On the other side of people not stopping things, I don’t think people push hard enough. I asked this guy: How’d you get your customers? 

He’s like, “Oh, I do blogging.” Like, oh really? He’s like, “Yeah, I blog twice a week.” 

He’s like, “Yeah, man, I’m maxing it out.” 

I’m like, no, dude, you need to do two blog posts a day. And then it can get to 10 blog posts. I mean, that’s more the Silicon Valley approach that I think I use ingrained in me plus, I think I’m aggressive. But I think it has helped work for our business.

That’s why I never brag about how many people work at the company because I don’t care. I’d rather have less people doing more cool stuff. But I think the growth, it’s like, well, what are you getting out of it? And what are we? What’s the sacrifice for that? So for me lately, I love meeting more people that we’re helping. I like seeing the companies who we’re promoting get rich, and customers taking it and getting rich. 

We opened up this marketplace, appsumo.com/sell. So if you have like a book course or software, we have people making seven figures now from them. And to me, I’m like, let’s fucking blow this up. Let’s get all these people super rich and help all these people, you know, create their own businesses.

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What are the keys to YouTube success? What should people consider before starting a channel?

A key to success is action. Try to make each video a little better than the last.

I’ve helped thousands, probably like tens of thousands of people try to start businesses, some have some haven’t. And the YouTube thing is new to me. I’ve only really gotten hardcore about it recently. So I’m becoming an expert in the past year.

We spend almost a million dollars a year on our channel. That’s how much we’re gonna spend this year on the channel. But you look at the channel, you’re like, “Oh, it’s pretty good.”

It’s a fucking professional team. I think YouTube is literally going to be one of the biggest job creators in the world. And not not just the talent in front. I think there also is backstage talent, backstage careers.

 “Hey, I’m the video editor. Hey, I’m the software person. Hey, I’m the script writer.” 

I’m actually hiring a full-time thumbnail designer right now.

How can people keep content creation enjoyable? How does the balance between success and enjoyment look?

Yeah, I think there’s definitely a balance in that. 

And so I wonder what can you do to make it more enjoyable for yourself? Look, I’ve started companies, I have millions of dollars. 

For my channel, I don’t want to talk about starting a business. I just don’t fucking want to show another goddamn person, how to go and get a customer because it’s just not interesting to me. But guess what, those are really popular. 

I think part of success is boring. The more boring it is, the more successful you are. Because that means it’s working. And that’s the hard part. Cause when it’s boring, you’re like, well, let me mix it up. But no, that’s the part you actually got to keep doing. 

And so I think you do have to figure out how you can find it stimulating. That’s the challenge of business. 

It’s challenging. We made a Logan Paul video and I was tired of doing it. I personally don’t care about Logan Paul. I don’t watch his videos. But he’s popular and I am curious if there’s interesting ways he’s making money or done his marketing. But now that the video is blowing up I’m like, dude, I love Logan Paul.

How do you pick the topics for your YouTube channel? How can people figure out what works?

How are you prioritizing the decision? How do you create some framework or some quantitative numbers to say:

“Oh, well, if we’re gonna make a video about other rich people, who’s got more Google Trends, who’s got more subscribers, and then that’s how we’ve tried to choose them.”

I think we’re also trying to choose who we are more excited to learn about? So we use a formula called FFR in our video making. The idea behind it is: What is fast? 

Can we crank them out fast? What are we having fun with, and what’s repeatable? So, one of the challenges I noticed in some of our videos is that we do a lot of these videos that were just not repeatable, it’d be like nine lessons about business I learned. It’s not fast to do. It’s fun. I think it’s a really helpful video, but it’s not really repeatable. I guess you could do like five lessons from chess or four lessons from McDonald’s. 

But these videos about how people get rich, they’re very repeatable.

(Here’s an example of one of those ‘how they got rich’ videos that Noah makes).

What does your morning routine look like – and how critical do you think it is for being successful?

I just don’t think people actually have morning routines. I think they have a routine that, when they type it, it sounds sexy, and when they publish it, it gets a lot of engagement on Entrepreneur, but the likelihood that that person actually follows that morning routine every day, 365 days a year, is about zero.

The actual question is: What do you think you should be doing every morning where you think you’re going to have the most productivity? And you’re gonna be like:

  • Wake up at 6:30.
  • Brush my teeth.
  • Ooh, instead of a hot shower, let’s take a *cold shower* ‘cause I read it on Entrepreneur.

There’s going to be a bunch of this baloney. Fine, try it for a morning, and maybe you feel like a little peacock with your feathers spread and you’ll be very productive that day. But guess what: you’re not going to do it every day, because you’re just going to go back to your old habits.

So what I try and do is just listen to my body. Some mornings I wake up and I can just tell I didn’t get a good sleep, so I won’t be able to write that morning. What I do instead is I just go on a run. Some mornings I wake up and I’m just ready to frickin’ go. So I just stay in my pajamas, grab a cup of coffee, and just write for five hours.

I think the key is actually avoiding any set structure or routing in your morning routine. Listen to your body and let your body go to wherever that is, which is why by the way, people with full-time jobs generally stay stuck in a full-time job for a long period of time. Because when you have a full-time job, you can’t listen to your body. You have to do the work, you have to be there at 8, you have to be off Slack at 6 PM, you can’t actually listen to your body. You have to work when you don’t feel like working.

So, the trick is to be super lazy, listen to your body, and then be very productive when your body is saying I’m ready to be productive.

Do you think subscribers are important for getting views on YouTube?

I don’t know. I will say that once we’ve passed 100,000 subscribers, I’ve noticed that I think YouTube gives our videos a little bit more of a boost. The numbers seem next level. 

Because you really think I think when you’re marketing, you have to optimize for the channel. So what is YouTube’s goal? YouTube’s goal is ads. And that it means that they want people who are putting up content that keeps people on YouTube and coming back to YouTube. And so I think they reward consistency, and watch time. 

If you have a bunch of subs, who never come back and ever watch your stuff, like you’re not gonna get rewarded. And, you know, I want those cookies. So for me to get a cookie, it’s like, put out a lot of videos consistently. Try to get as many people watching them as long as possible. So I see most of the top YouTubers are making like 20 minute videos. 

That wraps up Part 1 of our interview with Noah. It was a long conversation, and there’s lots more to learn – in Part 2, Noah chats about the secrets to AppSumo’s success, how to find what you love, the riskiest sex in the world, and lots more. 

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Stacked Marketer was built to filter through the daily noise that exists in the marketing world. It’s a digital marketer’s 7-minute daily read, jam-packed with the latest news, trends, tech and actionable advice.

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