Noah Kagan: 10 Life Lessons From the Guy That Lost $100 Million on Facebook

Noah Kagan is an entrepreneurial machine.

  • his “deals on products” site, AppSumo hit 500,000 customers in less than 18 months;
  • his company Kickflip Inc. was the #1 largest Facebook App developer;
  • his payment company Gambit reached $150,000/day in revenue with clients like Zynga, Tagged, Gaia Online, and Disney;
  • his new business, SumoMe, free tools to grow your website traffic, is already reaching 965,720,950 visitors – damn!;
  • and yes, he worked at Intel, was #4 at Mint, and #30 at Facebook (where he got fired and missed out on $100 million+).

This article is about the man behind the machine and how he operates day-to-day, month-to-month, year-to-year to get results like these.

These are 10 Life Lessons From the Guy That Lost $100 Million on Facebook

#1: Use Positive Triggers to Conquer Will Power

Willpower is a limited resource.

That means if you rely on willpower to go to the gym, eat healthier, get more work done, whatever, it actually becomes more difficult throughout the day.

Instead, Noah uses positive triggers — tiny little enablers that facilitate massive action.

Here are some examples:

  • Put your running shoes in the hallway at night, so in the morning you can’t get around them and will go running.
  • Don’t bring a power cord to the coffee shop, so your time is limited and you have to work instead of procrastinating.
  • Hang a pull-up bar on your closet door so you do pull-ups each time you get dressed.

These positive triggers work because they make it easier to take action than to not take action.

#2: Build the Business You Actually Want

Noah’s AppSumo did $5 million in sales in the second year.

He had 20 employees and a philosophy of “if it makes money, we will sell it”, even if the products were junk.

Then his friend Ramit Sethi joked, “AppSumo reminds me of Ross, you guys have a lot of shit, and once in a while there is something good at the bottom of the bin.”

Ouch. Noah realized “Your business is a reflection of you”. He was embarrassed — he didn’t want to be thought of as Ross — so he fired excess employees and revamped the entire business. Revenues were set back an entire year but he was happy with his business again.

#3 Find the Anomalies of Success

“We evolved a lot, we got sidetracked, I got greedy. But the original premise was always to promote cool stuff… and a lot of it to entrepreneurs and startups.” — Noah Kagan

When Noah started AppSumo he sold bundles of software. It took months to get a bundle together, and when he promoted it he would make maybe $5,000 in sales.

Then someone said, “why don’t you sell one at a time?” Noah says it wasn’t obvious before that. But when he looked at the numbers, most people were buying on the first day of promotion. So they broke up the bundles and did more frequent launches. The result? More sales. Also, Noah found that people didn’t want to buy a whole bundle just to get the one app they really wanted. Again, sales went up.

Now Noah recommends people look for Anomalies of Success by asking “what’s the part that is actually working?”

Here’s an example: Twitter is taking Facebook status updates and making it the whole thing.

Whatever your project, get laser focussed on the parts that are working and put other efforts aside.

#4: Pursue Exactly 1 Data Point

When you launch a project, it’s easy to get lost in data. How many visitors? How many subscribers? How many sales? What happens if we A/B test a different title?

Noah has a different approach. “At AppSumo, we only care about 1 data point. Same at Facebook. Ask, ‘What is the #1 data point that matters for the business? What’s the objective? For OkDork it’s ‘I want to get 50,000 email subscribers.’” Anything that helps get subscribers Noah does and everything else he doesn’t do.

Here are some more examples:

AppSumo — 500,000 email addresses
Monthly1K — 3300 customers (“that’s our whole dashboard”)
SumoMe — reach 1 billion people

Again, what is the #1 data point that matters for your business?

#5: Do Absolutely Nothing for 1 Hour

Ok, so Noah and I may be the only dudes here that hang out in float rooms.

A float room is a tub of salt water inside a chamber that blocks all outside sound and light. You effortlessly float on the water because it is so heavily saturated with salt. 60 minutes in a float tank reduces muscle tension and is perfect for meditation.

I usually follow it with a steam…

But many of us never take the time to relax. Instead we grind forward, settling for “time spent” instead of meaningful progress. If you spend 3 hours working on your project but aren’t mentally/physically fit, then you are at best moving slowly (and maybe making mistakes that will equate to negative-progress in the long run).

Instead, give yourself 1 hour to reboot. It doesn’t have to be a weird floating thing, you can go for a massage, acupuncture, sauna, whatever. Experiment. By doing nothing for 1 hour, you will actually be more productive with the rest of your time.

P.S: Don’t substitute exercise for this relaxation time. Throughout university I ran 50km per week — I know it’s great for clearing the head, decreasing stress, etc., but just focus on relaxing in a quiet environment.

#6: Processes Not Resolutions

This one is particularly relevant with New Year’s coming up fast. Most people set resolutions/goals like this, “I’m going to lose 20lbs” or “make $1 million this year”. They fail by February.

Instead, Noah gets more specific with his goals and breaks them down into specific to-dos (“processes”) that will get him there. One of his goals for 2014 was, “Weigh less than 160 lbs and have more defined arms.” This allows for fat loss/muscle gain and the do list includes long distance bike rides and hand stands.

Another one was “look for a life partner”, not FIND one, just look — with specific processes for getting away from the office and into more social situations.

Hitting your target goals is fun, but building processes means you focus on the in-between time where the real work gets done.

#7: Build a Launch Pad

Noah was employee #4 at, where he built a pre-launch list of 20,000 people interested in the product (click here to learn how).

They had users from day 1 and Mint was eventually acquired for $170 million.

Build a launch pad.

#8: Ask the Question You Actually Want an Answer to

Sometimes we ask questions out of habit or because we haven’t really thought it through.

“How are you?”

Pretty much everyone answers this the same way, fine, good, not bad, whatever.

BTW: In my mind, I convert “how are you?” to “what have you been up to lately?”, so the answer becomes, “I’m good, I had a new client today with an interesting project about XYZ, and I’ve been working on ABC, and I finally booked my trip to China.” Now the person you are chatting with has dozens of easy follow up questions.

But back to Noah.

Noah realized that just by tweaking his questions, he gets much better responses.

Compare, “What do you want to eat?” with “How do you feel about eating at that Japanese place for lunch.”

Of course the second one is easier to answer, and here’s why: “People are already going through 1000s of decisions everyday. What’s for breakfast, what am I going to wear today, why isn’t the heater working, etc.”

If you can ask questions that reduce thinking then you’ll get better responses to what you ask.

I love it.

#9: Focus on the “Why”

“People focus on tactics and looking for the answer, but not on the why, which is where they can really improve themselves.” — Noah Kagan

This one is a thread I’ve noticed between high performing people — instead of looking for a quick fix tactic that solves a problem short term, they try to understand the deeper reasoning of why it is happening.

It reminds me of a short story I read awhile back.

One day a man observes his wife cutting the wings off a chicken, laying it on a pan, and putting it in the oven.

So he asks her, “why do you cut the wings off?”

And his wife replies, “well, that’s the way my mother does it.”

The man asks his wife’s mother, and it’s the same thing.

So he asks his wife’s grandmother, and again “that’s the way my mother does it.”

Finally, he asks the great grandmother, “why do you cut the wings off a chicken before you roast it?”

And she replies, “I don’t know what the heck they are doing, but my old pot is too small for the whole chicken.”

The point is, you can save yourself time and effort by understanding the why.

#10: Choose Yourself (stop doing things that don’t make you happy)

A few months back Noah was a guest on the James Altucher Show (#43, the one with the “explicit” tag)

Here’s a quote from the interview on prioritizing yourself:

I’ve noticed myself doing things for others that don’t make me happy. I was supposed to go to Bali in June for a workcation with one of my closest friends. I was noticing I was trying to add a trip to Thailand after Bali. And I was doing it because I was like ‘Bali is going to be okay, but it will make the full experience fun if I go to Thailand.’ So my therapist asked me ‘do you really want to go to Bali?’ And I didn’t. I didn’t want to travel that long, I didn’t want to work from there. I know it’s Bali, that’s great for some people, but I like to work from home and the office… So I told my friend, I love you and I always want to support you, but if you aren’t going to be doing this event in Bali then I’m not going to go. And that was really powerful. Holy shit, I’m choosing myself, choosing what I really want to do.

We all face distractions. It’s totally okay to go on vacation, or out for dinner with a friend. But if you aren’t enjoying the time (or working toward an outcome that overrides that), then skip it.

100+ More Lessons from Noah Kagan

Want more Noah? He published a Virgin Guide of his best content (stretching back years). I recommend “Make it Easy to Say Yes” — which is a philosophy/strategy on making busy people WANT to help you.

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