Noah is a UC Berkeley graduate with degrees in Business and Economics and began his career at Intel as a marketing analyst in 2004. In late 2005, Kagan joined Facebook as employee #30, where he served as product manager for eight months. During his time, he is credited with pioneering the Facebook status update and its mobile application with Mark Slee. After leaving Facebook, he then became Mint software employee #4 as the director of marketing in December 2006. At Mint, Kagan developed the initial marketing strategy for the launch of the website which now has over 7 million users.

After Mint, in June 2007, Kagan founded his first major company, KickFlip, a payment company for social games. Kickflip was the #1 Facebook app company of its time and would eventually become Gambit, which served over 40 million users, had $18 million in revenue, and was the #2 payments company for Facebook games.

In March 2010 Kagan founded AppSumo, a daily deals website for digitally distributed goods. He started the company after seeing there were no product bundle or daily deal sites for the growing web applications category. The core vision was to help solve distribution for startups and eventually all digital goods. The website was originally created in one weekend using an outsourced team from Pakistan for $60. Kagan said he created the company after seeing opportunity to combine the popular daily deals model with the growing web applications field. Kagan described it as a solution for distribution problems faced by startups.

In contrast to deal sites such as (Groupon and LivingSocial), AppSumo deals exclusively with digitally distributed goods. Initially, the deals offered were for digital tools and software. The deals then transitioned primarily to learning based products, teaching customers skills such as programming languages, project management, and hiring practices.

Today, the website has over 700,000 active subscribers and is particularly popular among the startup community.

You can learn more about Noah at http://okdork.com/

Check out this episode!

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ANNOUNCER: Welcome to Creating Wealth with Jason Hartman! During this program Jason is going to tell you some really exciting things that you probably haven’t thought of before, and a new slant on investing: fresh new approaches to America’s best investment that will enable you to create more wealth and happiness than you ever thought possible. Jason is a genuine, self-made multi-millionaire who not only talks the talk, but walks the walk. He’s been a successful investor for 20 years and currently owns properties in 11 states and 17 cities. This program will help you follow in Jason’s footsteps on the road to financial freedom. You really can do it! And now, here’s your host, Jason Hartman, with the complete solution for real estate investors.

JASON HARTMAN: Welcome to the Creating Wealth Show! This is your host, Jason Hartman, this is episode #379, and today we’re going to do kind of a special show for you. This won’t be directly on the topic of real estate investing and personal finance. It’ll be a little bit more on the entrepreneurial side. But it’s just an awesome guest, someone I’ve been wanting to interview for a long time, and that is Noah Kagan. Noah is the founder of many businesses, and he’s a real business and marketing expert. You’ve probably heard of, or been a customer of, some of his businesses over the years. Maybe most notably is AppSumo. I’m sure you’ve heard of that company. And we’re gonna talk with him about some of that great stuff today, and then our next show, #380, we’ll have Peter Shallard, who is the shrink for entrepreneurs, and that, as you know, on the 10th shows, we do a general interest topic, and I think you’ll get a lot of benefit out of that one. And then, episode #381, I think we’re going to air a panel from our last Meet the Masters event with some real estate/finance experts, so I think that you’ll really enjoy that one. And we’ve got a lot of other great shows coming up for you as well as we get into the episodes in the 380s, as we’re approaching that big number, that 400 is coming up pretty quickly on us. So let’s dive in, and listen to that interview with Noah.

Oh, before we do that, one more thing. A lot of you have been registering for our June 28th Creating Wealth in Today’s Economy event, at the Hotel Irvine, formerly the Hyatt Regency Irvine, in Southern California, and we’re looking forward to seeing you there. The pricing is going to increase for that pretty rapidly. We’re on a super, super early bird rate right now, but that’s gonna go up pretty quickly as the event fills up and the date approaches. So, be sure to register for that at www.jasonhartman.com. And while you’re there, check out some of the great properties, and we will look forward to talking with you at that event. And let’s jump in, and hear from Noah Kagan. Here he is.

[MUSIC]

JASON HARTMAN: It’s my pleasure to introduce Noah Kagan! That’s probably a name you’ve heard. He’s been at the beginning in the genesis of many great companies. He was employee #30 at Facebook, and also very early at Mint, I believe there he might have been employee #4, and he’s created a lot of great stuff. His latest gig is AppSumo, you’ve probably heard of AppSumo, a very widely used website offering lots of great content and education. Noah, welcome. How are you?

NOAH KAGAN: I am amazing today. I’m not gonna lie. I’m doing really well. Thanks for having me.

JASON HARTMAN: Well, that’s great to hear. You’re coming to us from Austin, Texas, is that correct?

NOAH KAGAN: Yes sir.

JASON HARTMAN: And that is where you live now. So, tell us about your start, if you would, and just maybe take us through your career chronologically. Facebook, I guess, was the big start, right?

NOAH KAGAN: No, I actually, I graduated Berkeley, and I ended up in a cubicle in corporate life at Intel. And as I always kind of joke, I call it In Hell. And I kind of had a job that a lot of the people that might be your listeners, who aspire to have real estate, or a lot of people that I’ve worked or have been a part of through my companies want to have. And I was at this corporate job, and it really sucked. And I appreciated them hiring me and giving me a job, but I knew my goal, or my dream, was to kind of be my own boss one day. And I was about to quit, and I literally just sent in my resume to Facebook, and I got a call. And I think one of the things that really appealed to them, and I encourage it for your listeners, is I was always doing projects at night. And people are like oh, I have a wife and kids, or I don’t have time—and it’s, you always have time on nights and weekends if you really want it. And so, I was making a lot of different online projects for college students, and so, basically just got me in the door, and I got the job, and it was a chaotic time working there. Chaotic and very fun.

JASON HARTMAN: So, Intel wasn’t the fit for you. But, I guess Facebook wasn’t the ultimate fit either, right?

NOAH KAGAN: No. So, I think—and you know, it’s funny. I remember at Intel, I saw this old guy. He was like 50. And I guess at that time it seemed old to me. Now I’m 32, which I’m like, oh, 50’s young. 50 is the new 25.

JASON HARTMAN: It is. You’re actually not wrong about that, by the way.

NOAH KAGAN: You know what I mean? It’s interesting the way that goes. So I was at Intel, and you know, there’s people at Intel who are happy leaving at 5, and having minivans and going to soccer practice, and that fit their lifestyle, and there’s nothing wrong with it. But I wanted to be my own boss. So, Facebook was perfect. It’s literally like Lord of the Flies where it’s a bunch of young people doing whatever we wanted taking over the world with a lot of money and a lot of drinking and fun, and a lot of work. And it grew probably faster than I could handle it, so I was let go, which I put on OkDork.com, and you can read that story. And I ended up at Mint.com, and so, Mint.com is a free online tool to help people make more money. And I ended up there because a buddy of mine knew the guy who was starting it, and invited me to come check out the product. And I fell in love.

And so one of the things I’d encourage your listeners, for the entrepreneur people out there, is, what I’ve—where I’ve always made the most money, like in tens of millions of dollars—not tens of millions. Tens of thousands to millions of dollars—is where I’ve done products or projects that I personally wanted. And Mint was one of them. I saw it, and I basically forced my way into a job there. They didn’t want to hire me, and I just was very persistent until I got it. And from there I started two startups. One was an online gaming business where we did Facebook apps and then subsequently Facebook payments, where we did payments for Disney, and Gaia Online, and Tagged, and Zinga, and then, in the past three years, I’ve been running AppSumo.com, which is a free newsletter for entrepreneurs. So, we promote cool products and education that helps people kick ass. And the two products that we’ve released in the past two years, one is how to make your first thousand dollars a month, which is called Monthly1K.com, and our latest product, which is software—do people still say software? Is that old school now?

JASON HARTMAN: Yeah, a software is a service…

NOAH KAGAN: Seriously. We’re into technology, we use PCs—no, I guess people still say PCs. But it’s called SumoMe.com, and it’s a completely free tool you can throw into any website in under a minute, and it’ll increase the amount of traffic you have from getting more emails or more sharing. It’s just free plugins that we built. So that’s been my main attention lately.

JASON HARTMAN: Fantastic. Well, you’ve got some great articles on your blog, and I just want to ask you about maybe three of them, because they sort of overlap a bit, but they’re all about creating an audience, getting attention, and getting exposure. One is the formula for creating a one million download podcast, and the other one is hitting #1 on the Amazon bestseller list, and then the third, Noah, how to grow a blog to 100,000 visitors in less than a year. You know, you’ve been just extraordinary at getting exposure, and just having an awesome career. Tell us about some of these secrets.

NOAH KAGAN: You make it sound so easy.

JASON HARTMAN: Yeah, well, it’s not easy, I know.

NOAH KAGAN: And I think that’s part of—I don’t think I’m gifted or a lot smarter—I think I’m smart. I hope most people think they are. But I think what most people don’t recognize is that amount of times that I failed. You always hear that Michael Jordan quote, which is that for all the game winning shots I’ve made, like, I’ve missed like 80%. And I think what I’m willing to do is fail, and iterate from those failures. So as things have not worked out, I’ve said alright, so how can I now work on this. So let’s take OkDork for example, as a site, where I have a specific goal. Most people don’t really have a clear goal in the near term in just one thing, and that’s what I’ve always said, and that’s what I learned from Zuckerberg.

His only goal was to grow the site. And I would approach him and say, hey, let’s do these other things, and he would say no. Does it help grow the site? No. Then we don’t do it. So with OkDork, I said, okay, I want to grow my email list to 50,000 people. Now let me explore, what are different avenues for doing that? And so, I tried different things, and now I really try to focus on, what’s working? So for OkDork what’s working is, it’s pretty much a combination of two things. Number one: focusing my content. And I kind of used to just write about anything. I’d write about hey, I pooped today, and you should learn about poops, because they’re related to business, and it’s really funny, and here’s a poop picture. And people were like, okay. And it was funny, and it was fun, and some people liked it. But February ended, and as we go into March, I’ll be focusing just on marketing, which people really have been asking me for. And frankly, when I started putting out those posts, I’ve been getting the most traffic.

So that’s what I want to help people recognize in real estate and starting a business. As you’re doing something, you really need to look for the anomalies of success. And I think I’ve done pretty well of that. Which is being self aware for what’s working. And so, I put up posts around how to start a business relating to waffles, and a marketing post, and the marketing post did really well. So, most people just kind of keep doing things. I’m thinking, or what I’m doing is saying, alright, marketing is doing well; how do I do more of that? And then you really have to dive into that content. And so then I’d say, with marketing, as you’re starting a business, alright, fine, I figured out what works with marketing. What most people do is they do half of the work, but they forget the other half, which is promoting their work. And so, a lot of people write blog posts, and there’s zero comments, and there’s zero traffic, and then, so one, they have to decide, is a blog really gonna help my business, or help an objective that I have?

Most people will just do things because they think that’s what they’re supposed to do. Like, all these people have fan pages and Twitter profiles for the business. And I’m like, does that help your real estate business? Does that help your personal business? No! So, why are you spending time on it? Well, I guess it’s supposed to help? So what I’m trying to encourage people to do, is reduce your activities to what’s been working. And so, specifically, Jason, what I’m trying to get at, is with the OkDork, I write these posts that honestly, you know, and this is another thing, an anomaly I noticed. I used to do 500 word posts, and now I’m putting out about 3-5,000 word posts.

JASON HARTMAN: Oh, big posts, wow.

NOAH KAGAN: Massive. You look at these posts—like, that post you saw on podcasting? It was written by James Schramko, SuperFast Business. And he had great content, but his structure and his grammar and some of his organization was off, so I literally spent between eight to fourteen hours editing it. Total. But you only see it and kind of skim it, and you save it to your InstaPaper, or whatever, and you read it another day in the bathroom. But what I noticed is that these longer posts drew more traffic, and subsequently kept getting Tweets and mentions weeks later. So, it’s looking for things that are working, and then doing more of it. But the 50% that I was mentioning as well, if you’re growing your business is, it’s great to build your product, and I talked about this in Monthly1K as well, but you really gotta go out and get the word out, and get the customers. And so, I’d say that the writing is almost the easy part. If you’ve written something, and you’ve found what people are responding to, but I’ve actively said, well, now how do I get people to listen to it and read it and actually say, wow, this Noah guy is interesting, I want more?

And so, what I do—the way I do it is I always call it quant-based marketing. And what I do is, I try different marketing activities out. I track their effectiveness, and then I duplicate and expand and the ones that are able to scale. So, for OkDork, now I found out that advertising has worked really well for me, to grow my mailing list, because that’s my only goal. And so, I’ve doubled down on going from no advertising, to now I probably spend between $3-5,000 a month, and if I find that it’s working, I’ll double that down to $10,000. And you know, as we talked about at the beginning of this conversation, then I’ll, with my 20% time—you know, the 80/20 rule, everybody knows that one. So, 80% I’ll do ads, and write the content that I know people are liking, and 20% I’ll be like alright, maybe we’ll try out podcasting a little bit, and see what that does for growth.

Maybe I’ll try out guest posting. Maybe I’ll try out submitting it to different directories like Reddit, and Quibb, Quibb.com, or Growth Hackers, or Inbound.org, and see how that does. And then really what you’re doing is instead of just going all over the place, you’re harnessing what’s actually working. So, you know, this is what most people do. Is they write this content that no one wants, that doesn’t help their objectives. So reverse that, write it, and then spend the time to reach out to people that you think will actually make sense. And if you want to be super smart, reach out to them before you even need them. Reach out to them before you even want them to mention you or be a part of you, right? If you want to get on Quibb, go be active in Quibb, or Inbound. If you want to do a guest post, go comment. Go advertise around their site. Go send them flattery, or nice little gifts. But most people kind of do that stuff a little too late.

JASON HARTMAN: Yeah, yeah. Well, no question, that’s the old Harvey Mackay concept; dig your well before you’re thirsty. Great, of course.

NOAH KAGAN: Yeah!

JASON HARTMAN: Great idea, no question about it. No question about it. So, a lot of homework goes into that, and a lot goes behind it, if we call the homework forming the relationship before you ask for something, giving first. No question about it; great idea. Amazon, for example. Do you have a hack there, in terms of the bestseller list? I mean, a lot of these—a lot of authors sort of get all their friends to do it, and develop this big momentum for one day, and they’re #1 for like three and a half seconds. But they got a screen shot of it, right?

NOAH KAGAN: Yeah. You know, I haven’t been on Amazon. I definitely have good friends who have been #1, and I’ve actually worked with surprisingly a fair amount of authors who become top sellers. I’ve worked with Eric Ries a bit, with [unintelligible], and a few others. What I’ve seen be really effective—and you know, I hate cliché stuff, Jason, because I want action and meaty tips. So I’ll give you one cliché, and then we’ll get into some tips. Number one I would say is you write a book that people want to read. Because look. Here’s what’ll happen. And I’ve seen it! I’ve seen books that have been really well marketed, but they’re shitty books. That’s not gonna last. People see it, they read it, and they’re like, this is a piece of [redacted]. But like, Tim Ferriss’ 4-Hour Workweek—it’s been talked about for years, and it still gets—you know, it’s still a top-200 book, still a top-300 book. And regardless of whether you like Tim or not—I like Tim. He’s a friend of mine.

JASON HARTMAN: Oh yeah, yeah. No, I was just watching one of your interviews with him, where he’s talking about the way he developed the 4-Hour Chef, by researching what people wanted first, and then writing for it.

NOAH KAGAN: Exactly. And I think you should almost repeat that, Jason, because it’s—people just write these books, and they say, well now I’ve written the book. Now let me go find people. Tim works backwards, and I like working backwards, and successful authors work backwards to say, what is the content, and the people that want to read this, before I even write the book? And then you just—it’s kind of like a waitress at a restaurant. Or a waiter. I’ll be PC.

JASON HARTMAN: You’re gotta say server if you want to be PC.

NOAH KAGAN: Server, excuse me. I still say airline attendant.

JASON HARTMAN: I know. Yeah. Well, at least you don’t say stewardess, right?

NOAH KAGAN: Oh, we’re not supposed to say stewardess? Is that offensive? Anyways. What you do is, you think of it like a waiter at a restaurant. You go up, take their orders, and then you go make it. Most people, they start making the food, and then they say alright, who can I give this dish to? So that’s number one. If you’re gonna be trying to sell your book—Charlie’s post on OkDork was really massive and very detailed about getting on Amazon. Some things that I’ve seen really well: think about your Amazon AEO. We were actually talking about it at breakfast today with Charlie. Is when people are searching, how do you make sure your keywords are in your description? You know, your title and your image and your views, that relate to that? Right? So, that’s kind of one thing that I’ve noticed that has been really helpful. Secondly, how do you line up so that all of your promotions are at almost the same time? What most people do is they kind of wait til the book is nearly done, for them to do that. What I do, with my marketing, with all the business I’ve been a part of, is I create Excel spreadsheets before I really even start the products, with all of the different marketing activities, and the marketing sources. So what I mean by that is, let’s say I’m gonna do my Amazon book. I’m actually gonna be putting out a book about my times at Facebook. Before what I’m creating is, all the people who I know I can work with for distribution, and that I will actually track in a Google doc to confirm them for when it finally comes out. Does that make sense? You with me?

JASON HARTMAN: Yeah, no it does, totally.

NOAH KAGAN: What most people do is they get their book out and then they start spamming random sites and saying hey, you should probably Tweet about this, or you should blah blah blah.

JASON HARTMAN: You’re doing it with force. You’re planning it in advance, and you’re planning—you know, you’re really handling it like a launch. You know, the way Apple does a launch, the way a lot of Internet marketers do launches. You’re planning for it, it’s a cohesive, holistic plan, right?

NOAH KAGAN: Yeah. I mean, what I’m trying to do—I guess, the way I look at it Jason, is I’m not basing my success on luck. I’m basing it—I’m trying to guarantee it. Like, I’m trying to bet on it. And you know, I was talking with Charlie this morning, and he said—I asked him, I said if you could go back and do one thing, you know, for your book launch—because he wrote a book called Play, which I highly recommend. You know, there’s two things we decided, or that we talked about, that he said was very helpful. One, people with email lists or webinars, were very helpful to sell the book. And he would have done a lot more of those. And so, alright, well, who do I know that has an email list? How do I build a relationship with them? And then the second thing that we actually kind of were—we were just brainstorming on, is, nowadays a lot of people have Kindle or iBook, and they read on their phone, or they read on a tablet. And so what I’ve realized is that, I don’t really ever read PDFs, but I do read MOBI and EPUB formats. And so, I think there’s something interesting about, how can you give away your PDF, or a significant amount of your PDF for free? Which, people aren’t gonna read the whole thing. And then—alright, well, I want to actually get the rest of the book. Now I’ll buy the Kindle, now I’ll buy the iBook version. So, give away half your book, or three fourths of your book, and then say alright, if you really want to finish it, you don’t want to read this whole PDF on your laptop or desktop, so let’s go get you the convenient mobile version. So that’s a good way to get distribution, and then convert them to a buyer.

JASON HARTMAN: Yeah, absolutely. Very good points. So, you’re thinking about getting into podcasting, right?

NOAH KAGAN: I’ve been—you know, honestly I’ve been considering it about a year.

JASON HARTMAN: I think it’s long overdue, Noah. I would love it if you had a podcast.

NOAH KAGAN: I’m blushing, Jason. I wish you could see me.

JASON HARTMAN: I want to be the first voter.

NOAH KAGAN: What’s that?

JASON HARTMAN: I want to be the first voter that demands you get a podcast.

NOAH KAGAN: You know, here’s the thing about marketing for me, and the way I look at podcasts. I look at it just as another marketing medium. So, Amazon is a marketing medium, iTunes is a distribution [unintelligible] for podcasts. Advertising and Google, Facebook, and other places as medium for distribution. Google SEO as a medium for distribution. And I try to look at distribution channels as how predictable and scalable are they? And so, what I have—what I’ve challenged with the iTunes, is that I know it’s got scale. I just don’t know how predictable it is. And so what I mean by that is, when I buy ads, I know I’m gonna get more traffic. Or as I start writing posts that are significant in related marketing, I know that people are gonna share them and that they’re gonna continue. And with podcasting, I don’t have that certainty yet, or that clarity if I can hack it in marketing to figure out, okay, if I do x, y, z, I know I’m gonna get 10,000 or 100,000 listeners. The appeal to me with podcasting, and what I’m starting to really—besides the size of it—what’s starting to really appeal to me with podcasting is the intimacy. Because with the blog posts, how many blog posts have you skimmed or looked at today? Or YouTube videos? What would you guess?

JASON HARTMAN: Right. Oh, today, I’d say maybe 20 of them.

NOAH KAGAN: Exactly. I just looked at over 15 on Techmeme.com, which is one of my favorite news aggregators. I looked at 15. I probably looked on Facebook, I looked on YouTube, and you only commit like 2-5 minutes, and maybe more. But with the podcast, most people are in transport, they’re at the gym, and they’re dedicated to your voice. And my voice. My Jewish, nasally voice right now. And there’s some appeal to that, where they really build like a relationship, like no other. Like, even on YouTube, most people go to YouTube to watch a two minute video, or they go there to learn something specific, like how to do this with my guitar. But with a podcast, they’re open to listening to your advice, your opinions, your stories, and really saying, alright, well Jason Hartman, we trust you. What do you have for us today? And we are going to listen to every single word you say about that.

JASON HARTMAN: I couldn’t agree more, Noah. I hear all these people talk about their YouTube channels and so forth, and I think video is obviously great, it has its place. And podcasting can be video too. But I just think the whole format of podcasting is better. I love the audio format, because it’s totally portable. You know, I can listen to Noah while walking my dog. Well, I could, if he had a podcast.

NOAH KAGAN: Yeah.

JASON HARTMAN: So, that’s—or in the car, obviously. But, the other part of it is the way it’s so asynchronous, where it just automatically feeds through RSS, and you know, YouTube can do that too, but I don’t know. YouTube—I go to look for something specific, more often than not. Podcast, it’s a relationship.

NOAH KAGAN: I think you also have easier distractions on YouTube. Like it’s so hard—this is why I bought Kindle, finally. I finally gave in after a few years of having an iPad. Is that I’m reading on my iPad, and then I hit this like, oh, man, I should look at porn. Or on my iPad—I should email this person.

JASON HARTMAN: Yeah. That’s one of the things that Amazon has really promoted, is the fact that it’s not a multi-tasking device, per se. You know, it’s really a reading device. And I think there’s something to be said for that.

NOAH KAGAN: What would you say as your listeners, or somebody else who wants to create a podcast, what are the things that are unexpected or surprising about making a podcast, or growing a podcast? What’s something that I wouldn’t even know?

JASON HARTMAN: You know, I just think that power of that relationship, the idea that with your customers, whatever business you’re in, you are doing that Harvey Mackay idea, digging your well before you’re thirsty. You’re developing that relationship, and you’re bringing your customers through the sales funnel, and you’re doing it in a form that, where you’re giving first. You’re giving education, and you’re giving freely, and I think a lot of people in the—I’m gonna try and segment the concept of like, the Internet marketing field, when you look at the big, big people in the Internet marketing world—they don’t want to do podcasts, because their thing’s more about direct response, getting people to buy, you know, the formulaic long-form landing page, and the ‘buy now’ button that’s sort of in that off color of orange. You know, everything’s split tested a thousand ways. Which is great. All of that stuff has its place, and obviously they have figured out what works. But I just think the sort of relationship-oriented, just give them all your stuff, really. And let them discover where there’s value, and answer questions in advance. Makes your customer far more educated, and far easier to deal with. And Noah, I’ll just give you an example. In my real estate company—I have a real estate investment company. And the customers come to us, and they’re so educated in advance. It’s a wonderful way to do business with them. Because when we get people that aren’t podcast listeners, we think, oh gosh, do we even want this client? Honestly, it’s come to that. Because the podcast listener client is so much better. They just get it.

NOAH KAGAN: Well, so, that’s the thing. Are we saying that everyone should go out and create a podcast as their new businesscard, as a way to expand their businesses? Or is it—

JASON HARTMAN: I think so.

NOAH KAGAN: Really.

JASON HARTMAN: The great thing about it is, it’s not demanding. You can create a podcast where you release five episodes, and then quit. Or you can release five episodes over the course of a year. Or five years. One episode a year. I mean, granted, you’re not gonna have very much traffic, and the iTunes algorithm won’t like you very much if you’re not publishing, say, on a weekly basis. But it’s better than nothing. It’s something you can always refer people to. And it’s just a great way for them to find you and learn about you. And warm up the relationship. So, tell us a little bit about your personal finance experience with Mint. I mean, that company’s been an awesome success, and you were employee #4, right?

NOAH KAGAN: Yes.

JASON HARTMAN: Yeah. Tell us about it!

NOAH KAGAN: What do you want to know?

JASON HARTMAN: Oh, I don’t know. You mentioned before we started that you learned some good stuff about personal finance while working there, and helping launch that company. Maybe some of those insights, would be great.

NOAH KAGAN: You know, I’ll give you the #1 insight that was the most shocking to me when I became a part of Mint. And the #1 thing that was the most surprising about Mint was who our #1 competitor was. And that actually blew my mind. #1 and #2. So, who would you guess the #1 and #2 competitors were?

JASON HARTMAN: Oh, gosh. I don’t know. Either the personal finance guru people like Suze Orman, or QuickBooks. Quicken, into it.

NOAH KAGAN: Here’s—see, this is the thing that was the most surprising. Our #1 competitor was apathy.

JASON HARTMAN: Okay, fair enough.

NOAH KAGAN: No, but that’s what blew my mind. I was very surprised.

JASON HARTMAN: Changing behavior.

NOAH KAGAN: Exactly. Most people don’t do [redacted] with their finances. And so, how do you make—how do you enhance the behavior? And so, that was really surprising for me. And then the second thing I would say that really kind of blew my mind was that our second competitor was not a finance tool, it was actually Excel. And so I think what you have to realize as you’re building a business is that you can never change someone’s behavior; you can only enhance it, or help guide it, if the benefit is significantly better. And what we did is that we said, alright. We basically say, hey, you’re not doing [redacted]. Why don’t you just keep not doing [redacted]. Give us 30 seconds, and keep not doing [redacted], and now we’ll help you make more money, we’ll help you realize what’s going on, and you don’t have to spend any time if you’re using Excel, but basically let’s do that. And that actually worked out exceptionally well.

JASON HARTMAN: I can’t believe, though, Excel is a competitor to Mint. For the few listeners that don’t know, maybe just tell them what Mint does.

NOAH KAGAN: Yeah. Well I’ll tell you. I use Excel. I still use Excel.

JASON HARTMAN: Oh, my gosh. That’s a big confession. Did you hear that, everybody? Should we edit that out, Noah?

NOAH KAGAN: No. I’m proud of that. And I’ll tell you why I do it at the end of this. What Mint is, is it’s a free online personal finance tool. So you enter your bank account and credit card information, and it automatically will show you how you’re spending your money, it’ll give you alerts if there’s anything strange or fraudulent, and then they suggest ways for you to make more money. Like, hey, if you change this credit card, or hey, if you—I don’t know if they do this yet, but—hey, change this activity, it’ll show you how to make more money. I don’t know anyone in the world who doesn’t want more money. I really don’t. You show me that person, I would love to meet them. And then the reason I personally use Excel—and I still love Mint, and I think it’s great for a lot of people. What I encourage about Excel, though, is that it is intentional. It makes me actually go to my accounts, it makes me think about it, and I think if I got an email, and I keep getting an email every week, versus doing that, it would just change my behavior with my finances.

JASON HARTMAN: Well, I would assume that, you know, you mentioned Eric Ries earlier, and I would assume you’re a very big fan of the iterative process of developing things, and launching startups, and so forth. You know, any advice you can give people on startups, or that iterative process? If I’m correct, that you’re a fan.

NOAH KAGAN: Well, #1, I have a product. And I’m—you know what it is? You know, a lot of people who want to start businesses are—this is surprising. #1, they’re afraid of failure. And I have a product called Monthly1K.com, and I am extremely proud to tell people to buy that. And why that is, is because I’ve spent my life starting businesses, and I’ve put it all on this product, and I spent probably about $300-500,000 developing the custom software, and updating it, and we’re still paying people to run it. And that product shows you literally from 0-$1000 a month, if you’re willing to do the work. Which some people are, and some people aren’t. And I would say, as people are starting a business, what I’ve seen as the most critical things for iteration are #1 you’ve gotta overcome your fear of failing. So you’ve gotta get started. Which a lot of people just are—they kind of have their lack of inertia—is inertia the one that’s not moving?

JASON HARTMAN: Ah, well, inertia can go either way.

NOAH KAGAN: And I think that’s the point. That’s exactly the point. Is you start moving and start doing a little thing each day, you’ll start realizing, wow, this is kind of fun, I’m getting my business going. So, you have to overcome your fear. You have to validate, which most people don’t. That means basically three paying customers within 48 hours of starting your business. And we show you how to validate in the course. And I think what, as I said earlier in our chat, is that you have to look for the anomalies of success, which are, you know—and I fail a lot. I just keep iterating so that it gets to success. And the anomaly of success is, what am I doing that is actually getting a response? And what I mean by that is, like, I’ll put it in simple terms. Have you ever worn an outfit, or gotten a haircut, or done something publicly, that people are like, you look good! What did you do differently? And what most people don’t do is, wow, people like the way when I do this. How do I do more of that? They just kind of do that once in a while. And so when I see people—like, I have this taco shirt. Women for some reason go crazy over my taco shirt. And so I try to wear my taco shirt as much as possible, or find shirts that are similar to it. I think most people aren’t necessarily looking for, what is getting a response. Or, I started a business as an example three weeks ago. What I did a few weeks ago is I tried to start a business doing taco tours, where we bike around eating tacos and drinking tequila, and I could not—and I did it once for free, and we all loved it. But I could not for the life of me get people to pay for this the second time. Because it was free, and people were like, eh I don’t want to pay for biking. And I said, well, what if I do a craft cocktail event where I get a bartender to teach us craft cocktails, we get craft cocktails, and you get to learn and socialize with cool people. And I sold those tickets within the hour.

JASON HARTMAN: Right.

NOAH KAGAN: And then I said, what are other events that you guys would like that are similar? How about this? And then I sold—there’s an article on AppSumo.com that shows how I sold to $3500 in profit within about 72 hours.

JASON HARTMAN: Yeah. Awesome. Very awesome.

NOAH KAGAN: It was looking for what’s working, doing something I wanted in the world, and you know, getting off my ass and making it happen.

JASON HARTMAN: And not being afraid to fail. Because you have something called the Failure Olympics on the AppSumo page, on how to make your first dollar.

NOAH KAGAN: I appreciate you doing you research, man. A lot of people don’t. And that’s actually one thing I would say that most people want the end result, but they’re not willing to do the input to get that. They are like, oh, I’d love to have that much money, or, work from Thailand, or do whatever it is that you want in your own way, in your own life, but they’re not willing to do the work to get there.

JASON HARTMAN: It’s very easy to look like an overnight success. It only takes 10 years.

NOAH KAGAN: Yeah. And even with overnight success—this is something I personally started thinking about, which is, you have to identify what success means to you. Externally does not matter. A lot of people are like, no, you’ve been successful! But I never look at it as success or not success. I just try to do things that are fun for myself. And I don’t even think of them as successful. I just think, hey, cool. Now I gotta go to that event, which I did last night. Or this SumoMe product, cool. I gotta go to that. And I think if you’re having trouble starting, as you said earlier, we do have free products; one is called StrangerChallenge.com, and one is called Failure Games, which is an iPhone and Android app, which helps people get off and start doing little activities to overcome their fear of starting and their fear of failure with business. And frankly, with a lot of other things in life.

JASON HARTMAN: Yeah. Good stuff. Great, great thoughts. Great thoughts. Well, I would highly encourage everybody to check out the AppSumo course, which is how to make $1000 a month—or, how to make a $1000 a month business. Because from there, once you learn that, once you iterate to $1000, I mean, you can just duplicate in scale. So that’s fantastic.

NOAH KAGAN: Exactly.

JASON HARTMAN: Noah, give out any websites, or blogs, that you want to mention, so people can find you.

NOAH KAGAN: Perfect, man. I would say the best way to connect with me, and way to learn more about starting a business, or growing your business, I have a personal site is OkDork.com. And then the three other sites I think are really critical are AppSumo.com, which is a completely free newsletter which promotes tools and education to help you kick ass with your business. Third thing would be Monthly1K.com. If you’re looking to start a business, this is the best and most affordable way to do it if you’re serious. If you just want to play around, or you want to be an affiliate marketer, or an Internet marketer overnight, please don’t come to this. And then lastly would be SumoMe.com, which is a completely free tool you can throw on your site in under a minute, and you can get more sharing and more emails for free.

JASON HARTMAN: Awesome. Well Noah Kagan, thank you so much for joining us today. Awesome advice, awesome interview, and appreciate having you on the show.

NOAH KAGAN: Thank you very much, Jason.

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Transcribed by David

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