Noah Kagan is the CEO and Co-founder of Appsumo.com, a daily deals website for softwares. He earns approximately $3.3 million a year.
In this 8-minute CNBC “Make It” video, Kagan shares his personal and entrepreneurial journey; how he achieves financial freedom; and the lessons along the way. There are 4 main parts:
- Humble beginnings;
- Investment/Asset portfolio;
- Becoming an entrepreneur;
- Day in the life.
1. Humble Beginnings
I always had a dream as a kid to be rich. (1:08)
- I just didn’t know how you get it or what you do to get it, but I was like, “Man, I just want money.”
Humble background. (1:18)
- Father was an immigrant from Israel, didn’t speak English. He sold copiers door to door.
- Mother was a night nurse, and stepfather was a computer engineer. They were very frugal and very practical.
- Father was just wild: he made a lot of cash; he spent a lot of cash; and then he lost it all.
- An interesting observation: being able to make money through entrepreneurship, which was appealing, but also through a lack of discipline, being able to have all of that go away.
2. Kagan’s Portfolio
Kagan’s spending (2:14)
- A pie chart outlining his spending in December 2023.
Kagan’s asset allocation (2:12)
- Making money in the stock market and my own businesses.
- Losing money in most of my real estate.
- Trying to diversify into the S&P 500 and global index funds.
- Spending my time on active income:
- AppSumo.com;
- YouTube;
- the Million Dollar Weekend book.
Investment strategy (2:31)
- Equities: 35%
- stocks;
- index funds.
- Real estate: 30%
- rental properties;
- real estate syndications.
- Cash: 20%
- Risky: 15%
- cryptocurrency;
- small business investments;
- Rolex collections.
3. Becoming An Entrepreneur
Worked in big-name companies after college (2:59)
- Analyst at Intel.
- Worked at Facebook in 2005
- Fired after 8 months for leaking information information at Coachella to a press.
It’s a good experience to get fired. (3:12)
- Realize you might want to take control of your own destiny.
My dream was always to be an entrepreneur. (3:25)
- I didn’t know how it was going to happen, but I was trying things.
- Example: Making a sports app for Facebook users by copying the Facebook app. (3:31)
- Paid a developer for $10/hour.
- Had 10,000 people using the app instantly → 1 million users within a week.
Founding AppSumo.com (3:35)
- Realized I want to do something that people thought was really valuable and needed.
- Learned from his experience of working in big companies that software was going to get bigger.
- Borrow the GroupOn business model: help software creators get customers (a major pain point). (4:08)
- Users can buy discounted versions of various softwares.
- Paid the developer $48; purchased the domain AppSumo.com for $12.
- Posted on Reddit to get the words out.
- Growing over the years. (4:50)
- Year 1: Did not collect a salary. Put everything back into the business or hiring people.
- Year 2: Made $42,000.
- Year 3: Made around $75,000.
- Year 4 and Year 5: Made around $120,000.
- 2023: $80 million in gross revenue; $47 million in net revenue; a profit of around $7.1 million.
4. Day In The Life
Benefits of being an entrepreneur. (5:30)
- Best part: you don’t have to wake up to an alarm.
- You can choose how you want to spend your day.
- Kagan’s typical day. (5:35)