How To Market Your Startup The Noah Kagan Way

I really admire Noah Kagan because he’s repeatedly proven that he can build successful companies from scratch.

Noah currently leads Appsumo, a deals-for-entrepreneurs company that has over 600,000 people in its community. He is also known for leading the growth in the early startup days of Mint, which was later acquired by Intuit.

Recently, he made $1,000 in 24 hours selling beef jerky, an experiment that more or less started because he wanted to prove he had the formula for starting a profitable business.

No wonder he’s consistently listed as one of the best growth hackers out there.

I’m a firm believer that successful people like Noah have a pattern to their work. So whenever Noah does an interview or releases new content, I furiously jot down a lot of notes.

After watching hours and hours of Noah’s interviews, and reading pages and pages and pages of his content, certain patterns have emerged, and now I’m able to make a high level blueprint of how he does it.

I’ve broken the “Noah Kagan process” into 4 simple steps, while thinking about how you can apply his blueprint to marketing your startup.

1. Validation: prove that people will pay money

The most critical part in Noah’s system — indeed, in any business system — is validating your idea. If people don’t want what you’re selling, then you don’t have a business.

So when it comes to validating a business idea, Noah focuses on two problems: making sure it’s something he wants to do, then proving that a market of paying customers exists.

Indeed, there are plenty of opportunities where you can build a thriving business doing something you have no passion for. There are plenty of unsexy businesses out there making loads of cash.

However, Noah has noticed that when he’s super-passionate about something, it tends to succeed. He’s started businesses just for the money and they’ve fizzled out one way or another. In addition, as a marketer, it always helps when you yourself are in the target audience.

If you’re doing something you’re interested in, regardless of whether someone pays you for it, you’ll have a better chance of making through the grind of building a startup.

Let’s talk about the beef jerky experiment. This started as a challenge to his audience where he asked people for random ideas for potential businesses. Why did he choose beef jerky? Well, Noah apparently already spends “$100 to $200” a month on beef jerky. First problem solved.

What better way to validate your product than to get money from the audience that you’re targeting?

Moving on the second part: proving that a market of paying customers exists.

Noah draws up a list of people who:

• Have money and can afford what he’s selling
• Are willing to pay money for what he’s selling

Then he chooses the market that scores the highest on both criteria.

This is a quick exercise that helps you get focused on people who will be most receptive to your product.

So for the jerky experiment, he identified office workers and people who already eat healthy, then found ways to contact them and sold them pre-orders. What better way to validate your product than to get money from the audience that you’re targeting?

Noah is relentless in keeping validation as simple and as cheap as possible. His weapons of choice for this stage are phone calls, emails and one-page websites with a Paypal button.

How this applies to your startup

Marketing people may not think of product validation or proving product-market fit as part of your marketing strategy, but think of it this way: nailing product-market fit leads to traction. Traction leads to momentum. Momentum affords a halo effect that makes everything else easier, especially marketing in early-stage startups.

Validation also allows you to get a critical mix of quantitative and qualitative data early on. This quant data allows you to test what’s working and which marketing methods are worth pursuing.

Maybe you get a bunch of traffic from TechCrunch — then find that none of that traffic converted (a very common story.) Then you drill down into Google Analytics and find that someone mentioned you in a forum and that’s lead to a lot of signups. How will you change your strategy based on this data? Learning little things like this early on can save you a lot of time down the road.

The qualitative insights you get from this stage will also prove to be priceless later on. Noah usually initiates personal contact with his early customers, whether email or phone or face to face. As a result, he gets a feel for what language the target audience uses and gains an understanding for what problems they’ll pay to solve.

But let’s say that whatever you’re building doesn’t exist or has no reasonable analogy in the marketplace. What do you do?

In this interview, an audience member tells Noah about his idea for a prank app that you can use to scare your friends. How would you validate an idea like this?

Noah handed his phone to Tim Ferriss (the interviewer) and asked Tim for his phone number. As Tim started typing in his phone number, Noah yelled “boo!” and freaked Tim out. (how’s that for a minimum viable product?) Then he asked Tim if that was funny and if he’d download an app that can scare your friends.

As a recap, some ways that Noah has used to validate his product ideas:

• Create a landing page with a headline and an email form. Drive traffic to that page with Facebook or Adsense. Evaluate if conversion rates are acceptable relative to budget
• Use the Google Keyword Tool or Google Trends to approximate demand trends
• Look at the top charts of marketplaces: eBay, Amazon, iOS App Store, Google Play
• Demo an MVP to your target audience and ask for a sale

2. Quantify your marketing strategy

Now that you’ve proven that your startup has an audience that will pay, and you know how to communicate to them, it’s time to look at how you’re going to scale your efforts and bring your product to that market. You’ve sketched out who your target audience is, now it’s time to get them to use your product.

When Noah was hired at Mint, he had a goal of getting 100,000 users in 6 months. For many startups today, that’s an intimidating goal – now consider that he was asked to do this in the mid 2000s. Fortunately, as with everything in life, you can make things less intimidating if you break them down into smaller problems!

So Noah broke down the 100,000 figure into smaller chunks, and reverse-engineered where the users would come from. Starting with the end goal in mind, he build a model that looked at his potential traffic sources and estimated a conversion rate for each:

(Via: Quant-based marketing for pre-launch startups)

The 100,000 user goal is still intimidating, but at least now he had a plan of attack. When marketing startups, it’s a blessing any time you can reduce or remove any ambiguity.

How this applies to your startup

Say your management team tells you that “we need $1m sales because of [some legitimate reason.]”

A crappy marketer would just throw a bunch of stuff at that target. Buy some ads. Pitch a bunch of journalists. Sponsor a bunch of conferences.

It’s the equivalent of an army general getting a directive to win a battle, and their strategy amounting to throwing bodies at the enemy until there are no more enemies to throw bodies at.

On the other hand, a good startup marketer would take Noah’s approach and say something like:

Here are the 10 marketing channels we own and their potential reach. Here are the % conversion rates we can expect per channel. Here are the levers that we can control to influence these numbers.

This way, there is logic behind every dollar that you spend. The way you spend your time has a strategy behind it. This is crucial especially if you’re a seed stage startup, or a new product within a company fighting for budget.

As a startup marketer, you’re dealing with a lot of uncertainty. Having a marketing plan based on bottom-up metrics will help you visualize a path to success.

3. Hustle by doing things that don’t scale

After Noah proves that people want what he’s offering, and has a plan of how to get that product to those people, he then goes out and manually builds momentum and traction.

When starting from nothing, you have to do everything you can to build momentum. The hardest part of doing anything is getting started. It’s like an airplane – the hardest the engines have to work are during takeoff. It’s not easy to get to cruising speed.

One of my favorite Noah Kagan stories comes from his time at Gambit, a virtual payments company that he founded. Noah landed a deal because he noticed that their CEO was an avid runner, so he offered to subscribe him to a year’s worth of running magazines in exchange for an initial sales meeting.

Not a scalable, sustainable marketing effort by any means – but when you’re getting started, you do what you can do get it off the ground.

How this applies to your startup

Get your hands dirty. Execute, execute, execute. Here are some ideas non-scalable marketing activities to get the motor running:

• Tap your networks for referrals
• Cold calling / cold emailing. Don’t do this like your dad where you have a list of numbers and try to brute force your way in. Like Noah’s magazine subscription, find a way to provide value in exchange for their time.
• Door to door sales (gasp). Sounds icky, but this is exactly how Groupon got started.
• Search Twitter for people asking “how do I?” or “I wish somebody would” or other phrases related to your startup
• Make a list or influencers on Reddit, Hacker News, LinkedIn or any other relevant community; individually follow them and invite them to discuss your product

Think back to your quantified marketing strategy, and do whatever it takes to hit the numbers that you set. Noah has a Quora answer that has even more ideas.

4. Get people to talk about you by delighting them

Now that you have a validated business idea, a numbers-based marketing strategy, and some initial traction you should be sitting pretty.

At this point, you’re getting smarter with your marketing – you know your audience better and you know which channels are effective. You’re now able to invest time and resources on things that will make your audience love you, enabling your message to go even further.

I think this is where Noah really shines. I mean, consider this blog post that you’re reading. I’ve never met Noah, and yet I’m such a big fan of his work that I spent about a dozen hours writing what is essentially an ad for Appsumo.

How can you get your customers to have the same attitude towards your startup?

How this applies to your startup

Here are some of the things that Noah does to delight his audience. How can you apply these principles to your marketing?

• In partnerships, go above and beyond. In this podcast interview Noah ends it with ‘hey I want to do something special for your readers…lets give a gift for people who comment’
• Offer adventure. The Appsumo team once had an event where they would fly you out to a mansion and work with you on your business ideas
• Open the kimono. Noah has tons of videos on youtube where he reveals the nuts and bolts of his processes
• Co-create with your audience. Noah does the business equivalent of schoolyard dares. He regularly asks his audience to challenge him to do something difficult, then he goes out and does it. Even when he fails, the process is still fun to watch
• Have a personality. Noah is always going on about disc golf, burritos and tacos. His videos regularly show his personal email inbox, his browser bookmarks and whatever is on his desktop. This has a way of showing you that he’s a real person, and it’s very easy to connect with someone who’s clearly authentic

If your startup is already at this stage, taking some of what Noah does could infuse your marketing with a new angle that gets more people to talk about you.

In summary: make it actionable and execute

Perhaps the most important thing I’ve learned from Noah is that the most intimidating marketing targets can be made less daunting when you analyze it from the bottom up. This understanding, combined with some lessons from psychology, allowed me to get 1 million likes on Facebook.

Follow Noah on Twitter, Facebook, his blog at OKDork and of course sign up for Appsumo.

Follow me on Twitter and Facebook.

David Fallarme

Hi, I'm David Fallarme. I've been doing marketing in companies big and small. I like learning new things, so I'll share what I know with you.

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