Afford Anything - What I Learned from Losing $170 Million, with Noah Kagan

Episode Date: December 2, 2019

#228: In November 2005, when Noah Kagan was 24, he was hired as Employee #30 at Facebook. His stock options would have been worth $170 million if he’d cashed out in 2014, he says. But he didn’t see a dime. In June 2006, merely 9 months after he started working at Facebook, Noah got fired. Instead of making $170 million, he made zero. He fell into a deep depression for a year. Then he rescued himself by becoming a serial entrepreneur. He tried his hand at a lot of things -- including developing Facebook games, selling discount cards, creating a payment processor in the gaming space -- but he’s best known for his two most successful companies. In 2010 he started a company, AppSumo, which offers discounts on small business software. By 2012, AppSumo was grossing $4 million per year in revenue, with annual net profits of $500,000. Yet Noah wasn’t fulfilled. He pivoted. In 2015 he started a sister company, Sumo.com, which develops marketing tools for websites and online businesses. In today’s episode, Noah and I discuss reflections on business, money and life. Enjoy! For more information, visit the show notes at https://affordanything.com/episode228 Learn more about your ad choices. Visit podcastchoices.com/adchoices

You can afford anything, but not everything. Every choice that you make is a trade-off against something else, and that doesn't just apply to your money. That applies to your time, your energy, your focus, your attention. That applies to anything in your life that's a limited resource that you need to manage. And that leads to two questions. Number one, what's most important to you? Number two, how do you align your daily decisions to reflect that?

Answering these two questions is a lifetime practice, and that is what this podcast is here to explore. My name is Paula Pant. I'm the host of the Afford Anything podcast. And today, the entrepreneur Noah Kagan joins me for a fireside chat. In November 2005, when Noah Kagan was 24 years old, he was hired as employee number 30 at Facebook. At the time that he was hired, Facebook was a one-year-old company with only a few million users. It was growing rapidly. It was adding 50,000 new users per day. And it was at that time that Noah joined the team as a product manager. As employee number 30, he made a base salary of $60,000 plus 0.1% of ownership, which was equivalent to 20,000 shares. At their peak, those stock options would have been worth $170 million if he'd cashed out in 2014. But he didn't see a dime of that because in June 2006, merely nine months after he started working at Facebook, Noah got fired. So instead of making $170 million, he made zero. Noah fell into a deep depression for about a year.

But then he rescued himself by becoming a serial entrepreneur. He tried his hand at a lot of things. He developed Facebook games. He sold discount cards. He created a payment processor for the gaming space. He worked for mint.com for a little while. But he's best known for his two most successful companies. In 2010, he started a company called App Sumo,

which offers daily deals on software for small businesses. It's like a coupon for online entrepreneurs. Within two years, by 2012, AppSumo was grossing $4 million per year in revenue, with net profits of $500,000. Many people might have been happy with that, but Noah decided that he wasn't fulfilled, and so he pivoted. He offloaded the day-to-day management of the company to someone else, and in 2015, he started a sister company called Summo.com, which develops marketing tools for websites. Between those two companies, AppSumo and sumo.com, these companies that Noah has founded now have nearly 40 employees, they bring in eight figures of revenue. And so Noah has recovered from some serious setbacks.

And we discussed that, plus much more, in today's episode. I talked to Noah about his reflections on business and life against the landscape of everything that he's gone through. Now, a couple of notes before we start this episode. First of all, today's episode is very different from my normal interviews. I wouldn't really call this an interview. I would call this a conversation that Noah. and I had that we recorded. Noah's a good friend of mine, and we recorded this in person in April when I was in Austin,

Texas. And so it doesn't follow standard interview format. It's really, it's a fireside chat. It's a conversation. Noah and I basically hung out and hit record on it. This is not a nice, clean interview with a narrative arc. This is us chatting, hitting record. And at one point, midway through the episode, Noah actually turns it around on me and reverse

interviews me and starts asking me a bunch of questions. And so if you want to hear two friends who are both. Both entrepreneurs discussed their reflections on business and life, that's what's coming up. And we're going to play that right now. Here's Noah Kagan. So Noah, before I ever met you, I didn't actually know that you had a company. I had heard of you only in the context of the guy who got fired from Facebook. Oh, wow.

Yeah. I've never actually asked you about that. I've known you for years. Yeah. And I've heard on other podcasts that you've done and in interviews that you've done, you've talked about the way that that affected you, a depression that you went into after that. Can you tell us about that? I think what's interesting about the experience and what I try to share more for others and their own stuff is that my identity was really tied with the company. And so I think

that was kind of an interesting experience about like, wow, it sucks if someone can just take your identity from you or how you should establish your identity. I think I was really disappointed because I cared so much about what we were working on. And I also cared that like I knew the company was going to be gigantic. And so it was like, it took the thing I loved to work on and who I identified myself as and then this giant amount of money that I'd be worried. And I'd be, worth. I still remember the day, we went to this coffee shop on University Avenue and they fired me there and I was just like, was this real? I remember I went and bought a pack of cigarettes and then went to the balcony. I lived in a house with six other Facebook people. I moved out that day. I just

put all stuff in my car and I moved to my friend's place. It was a tough time. One thing that was helpful, I went to this life coach or business coach. Right. One thing that she did that was a really helpful exercise. She's like, I know you don't have this thing right now. But what did you really want with all the money? For the money so specifically, she's like, what did you want to buy? And I wanted to buy an M3. I wanted to buy a house. And I think those were kind of the two things that I wanted to buy if I would have gotten the Facebook money. And she's like, well, can you afford those? Or is that something that's attainable?

I'm like, yeah. She's like, it doesn't sound so bad. Right. I think the other thing that was helpful from the Facebook experience was it really was my identity. I really think everyone should get fired. I think it's like the best thing ever. Because it's just like, oh, wow. It was interesting for it to be taken away.

And I think it really helps define character when it's going bad. But yeah, I think it was just like kept going. And I think for me it was like, well, let me just keep going and doing the things that I'm really interested in and keep looking for that. So when you talk about talking to that life coach and she asked, what would you buy with the money? What strikes me is that money isn't just for buying stuff. It's also for ego validation. It's also for identity. It's also for reducing your anxiety about the future.

Like it serves all of these purposes other than just buying a house. I think everyone has their own different relationship with money based on their upbringing and then their net worth and then what they value. And so that's something that I've been working through since those days and even until until now. It's something that you got me reflecting on is that the more money I've gotten. And I do have seven figures of money because the stuff has gone well in our businesses. Right. I still act like a pauper. And I think everyone has different blocks about money in different ways about what they value where they spend.

Like a friend of mine spends all of it. And he's like, I'll just know I'll make more of it. And for me, I'm more of like the hoarder style where like I get more, but I don't necessarily spend it proportionally to how much. much I'm making. Where do you think that comes from emotionally? Do you think that that comes from a place of fear or does it come from no, this is a value that I am consciously choosing? So one thing, and I don't know the answer that I've observed about my own relationship with money, is that if it's for the business, I have no problem spending. Yeah. And then when it's for myself and loving yourself and like being special, I'm like, nah, you know, it's very hard for me to do it.

Like, I have a, if you come to my house, it looks like a crack house. A million dollar crack house. No, no, no, it's half a million dollars. Oh. It's the house we bought. Oh, got it. It's a, we actually tried to buy the house across the street. Yeah.

But I didn't want to pay the full price. And so we didn't get it. So I got into a depression and then I bought the house across the street from it. And so I was joking at lunch, you come outside of my crack house and you look at your dream house across the street. Oh, no, no, but it's self-imposed. It's not. And it's like, yeah, I still am working through why.

I can spend money and things, but business. it's really easy and then self, it's a lot harder. One of the things that I've stuck with right or wrong is that I still live like very basic. Like I was talking to the guys at lunch today at summa.com and I was talking to him how I wanted to live in a house where I don't have to get a job. Because I feel like you get a big house or you get all this expensive shit and you're obligated to go to work. Right. Which then means like I'm working for the house. I think one thing is that a lot of people like Fat Fire. I love reading Reddit Fat Fire and I think a lot of people think it will make them happier.

And it's a lot easier to be happier with money than without. I'll tell you that for sure. But you still live. Like, I think sometimes I thought once I got to a million, that was like my goal after Facebook. I was like, I want to make a million by 30. Like that would, to me, that seemed like a big number. Now I guess millions are the new 100,000.

But you still live. Like, you don't get a sticker. There's no awards. There's no trophies. And so I think it's like, how do you just find a job or company or do whatever it is that you can just keep doing for the next hundreds of years? You floated around for a while after Facebook. but what you lost was more than just money. You lost identity. And it sounds like you lost meaning,

you lost purpose. You lost your roommates. You lost your social circle. Like your actual in-person social network. Literally. How did you recreate yourself? Because it sounds like you were just stripped down to nothing. Yeah. I think for myself, like I just go through a different, there's like a cycle or phases, like the seasons of life. I do it about every 18 to 24 months. And so I think with the six months that I wasn't working at Facebook. I spent a lot of time just like experimenting. Like I always thought it was like a buffet. Yeah. Just like the buffet of life where I tried a lot of different things out and it was like Korean consulting. I helped a company called scanner. I put on conferences, met people, did coffees. And like some of the people like Tim Ferriss, those are the kind

people I was able to meet and help out before his books came out. I was blogging a lot back then. It's just like coming back and like, okay, what are the things I really enjoy? And even today, I did this last year. I made a list of like, all right, money aside, what would I work on for free? And I made a list of that. And then I was like, all right, well, that's just what I'm going to work on. And so I think it was just like going back to find myself was really just going back and finding the things I enjoy.

So I like doing the conferences. I like doing the blogging. It turned out I found this product, mint.com, where I was like, okay, this is my next thing. What strikes me about that right now, you're set. You've got money. You've got passive income. So for you right now to make a list of what are the things that I enjoy and do that makes sense because you are currently in a position of strength. What strikes me about what you've just said

is that you were also doing that when you were in a position of weakness. Yeah. It's funny because I was trying to think about this recently about, you know, power and weakness, but more, like, am I just doing the things I really want to do? And maybe some people are more strategic or less strategic. I think I've been more middle-sided where I'm like, okay, what do I really want to be doing? And so for me, at Facebook and even at Mint, my goal was always like, I want to just run my own business. Frankly now, I wouldn't mind working for someone else if I could get everything I get out of this lifestyle. But I knew that was kind of what I always wanted to do. And so it was like, what are the skills or how is this leading me towards that? I guess it was also like my lifestyle was so affordable. Like I lived at my mom's house. I didn't really have many expenses. I think nowadays it's really cheap to live. And so you can have these lifestyles and take more risks about the things you're trying to create.

Right. When did you create absumo? Absumo started in 2010. And that was your first company? That was the second one. Oh, that was your first? So for me, the first one. So for me, the first. first one that hit was a discount card. Yeah. I guess I've always been doing discounts. I think the bigger thing was that I just started doing things. Because I think a lot of people that want to have a side hustle or they want to have, you know, some side income or full income, it's that they're just like reading the books about it and they're listening to the podcast, but they don't do shit. The thing with the discount card is that I was doing consulting for local businesses at Berkeley when I was in

school there. And that led to one of the people I worked with one of the interns who was like, why don't we do a discount card? But if I wasn't already putting myself in that place, that would have never happened. And so for people who are like, I want to start a set income, literally, I think the easiest thing is go sell something on Craigslist or Facebook Marketplace or eBay today. Grab like a bucket of your shit at home and sell it there. Or go hit up one of your friends. Be like, can I come over with a box and grab your stuff and I'll sell it for you? And I think that stuff, that movement will lead to things. So for me, I did the discount card. That made like 50,000 in college revenue and I think like 10 or 15K profit. The first company

where it like really hit was I was working at mint.com. I loved mint, but I knew it was. wouldn't get me to the wealth I wanted or to the lifestyle I wanted. Like I didn't want to come to that office. I wanted to go work in Thailand. I wanted to like frolic on the beach and drink my tithes. And Mint was awesome and I loved it and I was really grateful to be a part of it. But I knew that's where I wanted to go. So literally I would wake up at around like five or six on weekdays. I'd work on my lunches. I'd work on weekends. I'd work on nights to finally get stuff going so that I could leave. And then I built Facebook games. I was one of the larger Facebook app developers. I think there's two different ways of running a business. Either you can do what's already

And it's easy to catch the wave or you invent something brand new where the way I do it, which is kind of a fast follower stuff, my wins aren't gigantic, but it's likely to work. So doing a coupon for software, which is what Absumo.com is. Right. It was pretty much going to work to some extent. But like Uber and Lyft invented something brand new, which could have totally failed or been, you know, $20 to $100 billion companies. Right. So it's just kind of, I like the idea of like kind of have an idea that someone's going to work more so. So you describe yourself as a fast follower, but there are.

so many things happening. How do you know what to follow? And how are you fast enough? Yeah. If I reflect on all the companies that have done, so like the Facebook games, discount cards, we did a payment processing for games. The things that I've done really well and fast followed, frankly, at the end of the day, just solved my own problem. And I saw these Facebook apps as a way that would grow really fast. And I wanted to make $3,000 a month and go work in Thailand. There's opportunistic businesses. And if you're starting out and you don't have anything, just go do opportunistic stuff. Right. But as you get some stuff going, I think you should be intentional about solving your own problem. So if you look at App Sumo, I was tired of doing

the games and I was like, I just want to get cool software to run my company. And then I was like, well, what if I can just promote the software and get a deal on it? And then I just went out and got the software that I wanted. So I just went out and got the software. And then I blog and OKDorke. And I was like, man, I want to collect more emails. Right. So that's where Sumo.com came. Because it was like, let's just create the marketing tools that we're using for App Summo and Sumo. So I think ultimately it was like, solve your own problems. I think too often people are like, okay, I think I can try to sell this to these people. It's like, well, why don't you just sell it to yourself? And you know that other people are going to like it afterwards. Has that ever failed you? Have you ever tried that and it hasn't worked out?

Yeah, all my stuff fails. Most of my stuff fails. It's kind of a continual evolution. I think what a lot of people think in business is the grass is greener. This is a common problem I know I have and a lot of entrepreneurs have where you start something and then you think the next thing or the other thing will be the better thing. Like, oh, this other thing's actually going to save our ass when in reality, I think most businesses could double, triple or 10x doing more of what's already working instead of trying to find a new thing. Well, with Absumo, you mentioned on a different podcast that there was a point, 2012, you guys are grossing four million a year, you're doing profits of half a mill a year. And it was just not fulfilling. That was a point where you went in a different direction with it. The thing that struck me when I heard about that, as you were talking about that,

was that for you to go in a different direction with it, you had a team of like 20 at that time, and a bunch of them had to get fired. Yeah. It's one thing to fulfill a passion or fulfill a calling or go. in the direction that interests you when the only person who is affected is you. But when you're pursuing greater meaning and people lose their jobs as a result, how do you do that? I started off my career getting fired right away. And after going through that, it's definitely very sensitive to every single person. I've never really talked about it or thought about it out loud. I have a real

sensitivity to wasting other people's time. Hmm. I think one of the worst things in the world is to impose. And so with the companies, like with app summa.com or with summa.com and the people I work with, I feel very guilty if I feel like I'm wasting their life. Like I'm not making their life better by being a part of it. And so I didn't take it easily. But I think what I've realized about letting go of people or people quitting, most people who you let go are actually happier about it. And I'm not trying to say, I don't, I'm not trying to be like a capitalist. Like, I'm setting them free.

It's not some bullshit like that. But most of them know it's not working out or it's not their calling or where they want to be. And I'd say almost nine out of ten times, they're happier. and or when it happens, they're like, yeah, I was going to quit anyways or yeah, I haven't really liked it here. And it's frankly obvious by their work. You can tell the people who are like wanting to show up. Like if you stop paying them, who still want to keep showing up. And there's people that's who you really want to have around. And so at that time, there was four of us total who really wanted to stay around and keep working on what we were doing. For me, I have a lot of appreciation personally for people who've worked with me. I'm like, have you given your life to be a part of something that I helped create and you want to help create. And you want to help create. as well with it, I feel like you should always value them and always appreciate it. We did a round of layoffs in December. And so of the people, you know, I reach out to be like, hey, did you get a job? How's the thing is looking? I want them to do well. It just wasn't here that they were going to do their greatest stuff. So you put up this photo once in a talk that you gave where you

showed a photo of the attendance of a meetup that you had planned like way back in, I don't know, the early 2000s. And there were a whole bunch of people in it, like Ramit was there. The story that you told was this was just a random meetup that I planned. I posted it on Craigslist. All these people showed up. And then you go through the people in this picture. And like, basically every single one of them are all exceptional in whatever it is they're doing. And what struck me about that picture and that story that you told is that you pick people in the way that great stock pickers pick stocks.

Like the likelihood of every single person in that photo going on to do something great. rate is quite frankly rather low. And so the story that you told of these are just random people who showed up at my meetup and look, now all of them are brilliant human beings. It struck me as almost a little bit unbelievable. It's like, how are you so good at picking people? Well, I think it's more for the listeners as well. It's like how do they build a better network? I think is really the question. I think the bull's answer that no one wants to hear is that I went out of my way to figure out like who two things. But number one, who can I go up and help? And that one's always hard because it's really easy to want to ask things all the time.

Like let me ask Paula for like real estate advice. Let me ask Noah for marketing or startup advice. And I think with a lot of these people, it was like, how do I help promote them and whatever their interests are? So if they're like Guy Kawasaki, I spent two years promoting him before I ever asked him to come speak at a conference of mine. And that's how I was able to build a relationship. And so number one, if whoever it is you want to build a network in, like can you put on a dinner and just have awesome people at a dinner that you're paying for entirely? The second thing in terms of the people I'm surrounding myself with are. looking for, I'm generally just looking for people that impress me. The word is wow. And so the thing

that I'm still doing today is that when I see something that impresses me in any level from like a website to a book, to anything, I just reach out to the person. And it literally could just be a compliment. I don't think I really have any like ulterior motives than just like connecting with impressive people. And then the internet is a really small world where you don't know we're going to collaborate or work together in some other way, but maybe just compliment the people that you really like. But I think back earlier in my career, I was geographically in a place where there's a lot of smart people. Like I was in the Bay Area where there's Max Levchen and, you know, Zuckerberg and all these people that made it easier to be around. So that's probably another consideration. And then

the last thing about it being impressed people was that I made a big effort to bring them together. Smart people have other smart friends. And so when you find them, try to see how you can like, oh, why don't you bring a friend or let's try to host some dinners or things like that. But yeah, just go look for the people that you're impressed with. I mean, that's the easiest one. And just tell them that you're impressed and stay in touch with them. Look for people who impress you and then keep them around. Yeah. I think my filtering is pretty strong.

And that's led me to, I think, do really great things. Yeah, I would agree with that. I do think your filtering is very strong. If I were to name what I think that your core talent is, it's picking really good people and surrounding yourself with that. Yeah, in terms of filtering, like Neville, one of our mutual friends from copywriting course, I think I was just always really impressed the things he did, like from his videos to his experiments to his writing. And I think very early on, I was like, I realized my calling is more promoting the people that are creating amazing stuff than making the amazing stuff myself. I've never thought of myself was the smartest, but I was like, man, it'd be amazing to be around the smartest and most impressive people and then figure out how best to share their stuff.

And that's what I've realized like my stuff is. Like everything we do in Sumo Group is about that. It's promoting other software or giving people like with Sumo, giving them the tools to do it themselves. With Sumo Group, you once made this comment about how you're in office. a space that was too small. And you felt like that limited space was limiting your growth mindset. Yeah. Well, now we have a space that's too big, which is, yeah, I think you'll go as big as you think. And so I think there is something there where if you think your company can only be a certain size, like you'll only go and play to that level. Now I'm more in the mindset, like go do we work

or co-working where you have more flexible office space. So if you change your staff dramatically, because now we have 8,000 square feet for, I think, 11 people. It's like, I think people need about 100 square feet per person. With what you said earlier about you go as big as you think you will. So a lot of people say, you know, take your goals and 10x them so that you then think in those terms. Yeah. How do you do that in a way in which you deep down internally believe that's realistic? It's so funny because when I share with the company, I don't have an ambition to go public. I don't have an ambition to be a billionaire. I think it just has to be genuine. And what is genuine, right? Like, what is your true self. It's just like doing what you want to do. And I think

that's what fire really is where without apologies and without permission, I can actually do. the life and the work that I really want to do. And so I don't think about going bigger. I think about going smaller. Personally, and I think like with Sumo, I don't, you know, the guys have come to me. One of the guys came a few months ago. I was like, let's build a $50 million business. And I was like, why? What's the difference between what we're doing now in a $50 million business? And I think you, it's not that you, it's bad. I don't think making more money is bad, but is it doing more of the things we want to do? Do we keep getting to run the company the way we want to run it. I want to answer your original question, too, about 10xing goals and things like that.

I don't think it's bad. I think people should just do what they really want to do. Like, I have a friend, Adam Gilbert, my body tutor.com. He's one of my best friends. He wants to build a bigger company, but he just loves doing health coaching individually. To build a bigger company means you don't health coach because you're managing the coaches and then you manage the coaches at coaches. But for him, I think he truly just loves doing that. I think generally, like for me, I've made the most money and had the most fulfillment when I've just done the things I really wanted without the intention of just trying to make money. I think when I've put the money first is when I've made least money or it's been the fastest to quit. Right. And why do you think that is?

Because I think your intentionality is different. Like when I'm doing something without the point of money, it's very hard to stop me. It's hard to stop if it's just something that you want. I think for everyone that's listening, you can think about, okay, what is something you're really proud of accomplishing. And generally when you think it's something you're very proud of accomplishing, there's two key things. Number one, you really wanted it. And number two, it was hard. Yes. Yeah. It's hard. It has to be hard. Yeah. If it's too easy, it's not really fulfilling. So, yeah, I think that's where if you go back to things you really want or things you're proud of and like, let me just kind of figure out how do I can keep doing that stuff. For me, in my journey,

that's been serving me well. And I think when I get distracted with the ego or I get distracted with like the status or the money stuff is where it set me off course. When you bring together impressive people and they have dissenting voices, how do you navigate that? It's been surprising. It was really surprising. I think it's not about dissenting opinions. It's more about respect. One of the things we do is in these knights of the roundtable, if we're all agreeing, I'll assign someone to disagree. Because I generally think if everyone's like, yeah, it's great, I'm like, okay, well, what is the caveat? What is the devil's advocate around it? To really re-forge and, like, strengthen the ideas that we want to do. So I would encourage more dissent. But I think eventually it's like what's the merits of how do you make a decision?

It's a whole super long episode. But point being is like, what's the best decision and why is it and you just choose? Right. But then when it does come to decision making time, how do you become better at making decisions? So I'll give you two things that have helped. So number one is that you have to determine what's the goal that you're trying to decide towards. I think a lot of people make the decision, but it's like what is the priority of that goal? So for a stupid example, a long time ago, I wanted to buy headphones.

And I tried the Bose headphones and audio technica and all these headphones. and they all felt the same. They were the same. And my friend was like, well, which one's the most comfortable? And I was like, oh, the Bose one's the most comfortable. He's like, just choose it based on that. And it was kind of just an interesting decision as like, what are you choosing based on? And I think that makes your decision's easier.

I think what's interesting related to this stuff is also how do you focus on what you're great at? Like, you know, Neville and I were talking about real estate and, you know, you talk about real estate. And I think a lot of people, oh, I want to buy a house. And for either status or ego or financially, it seems like the best thing. But I do have to remind myself, too, it's like, well, what is my unique skill? My unique skill is not being a real estate professional.

My unique skill is generally like finding great people or finding great products and promoting the shit out of it. I did this analogy in one of my podcast episodes, which was like talking about waves. I think it's just because I'm in the ocean and I'm on the surfboard or boogie board and I'm paddling and I'm trying to find the wave. And eventually I catch the wave, but I'm putting myself in the ocean so I'm in the place where it's going to happen. Right.

That goes back to the fast follower thing. Yes. You just paddle and paddle and paddle and eventually a wave comes. Yeah. I think too many people are sitting on the sidelines. Keep producing, creating in other capacities. Try to find the amazing developers and give them awesome stuff that they're excited to work on. Find products out there that Absumo can promote.

Find people like you on my show that I can share your stories. Thank you. Yeah. We'll come back to this episode after this word from our sponsors. Do you want to wear shoes that are environmentally friendly and comfortable and as you're going to festive gatherings this holiday season, also fashionable and look good? Well, check out Rothies. really good looking flats that are made out of recycled plastic water bottles. In fact,

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Again, that's two whole months of unlimited access to thousands of classes for free, as long as you go to this special URL, which is Skillshare.com slash Paula. Give it a try, two months free, Skillshare.com slash Paula. That's skillshare.com slash Paula. Let's talk about money. Yeah, let's talk about money. How much money do you have on you? So I have two ones, and then I have 24, $5 bills.

What I do so many $5 bills? What I normally do is I'll go to a bank, and I'll get a bunch of money converted into one so that that way I can leave tips. I went to an ATM, and the lowest denomination they distributed in was five, and so I knew that I was running out of ones, and I wouldn't have time to go see a teller. So now I guess I'll be tipping people in fives. Damn. Yeah, good tipper.

Yeah. Are you normally a good tipper? I am these days. You know what? That's actually a good question because when I was in high school, I will admit, as a high school student, as a college student, I was not a good tipper because I felt a lot of insecurity about the amount of money that I had. I felt this constant scarcity. And feeling scarcity, I didn't feel like I had enough to be generous. Now that I feel a greater sense of abundance, that shows up in me being more generous. Yeah. Do you think that's like an experiment for people? You know, it's easy to feel abundant when you're rich. And it's also relative what rich is. But I think it's a good experiment to like if you want to feel abundance, just go try giving that money away or tipping into a lot of people and see how you actually feel. If you want to feel abundant, try being a little bit more generous. Yeah. And people often think that they limit the term giving only to nonprofits or charitable giving. And certainly that's super important. I ran a big charity water campaign on my podcast last year. We raised almost $22,000 for charity water. So certainly giving the nonprofits is important, but also giving in these small ways, tipping five bucks in situations where most people would tip either zero or one. Totally.

Someone said this, Jonathan Coon from 1,800 context, when he tips, which I thought was interesting, is he tips so much that it's memorable. When you tip, because sometimes I'll tip and it's, you know, you tip 5%. But when you tip 40 or 50%, those people are going to remember that for the rest of the day. Yeah. That was an interesting thing. Another thing my friend Brian does, and I started doing it because of him, is that, like, being in the ocean, it's also being generous. But it has to start somewhere. And so if you're not comfortable, I think there's levels of life. So what he did, which I've copied is that you just start doing monthly donations of small amounts. What I do is that I started at like $5 a month to any service that I use for free that I'm not paying for. So NPR, Wikipedia, but basically things that I benefit from, but I don't actually have to pay. And so I started with smaller amounts. And then over time, now it's like up to $20 a month or I don't know if a few more at 50. But it's something I didn't start at that amount because I wasn't comfortable with it. But now I've worked up where it's easier for me to do that.

Do you still find money motivating? Yeah. You know, it's not that it's motivating, but it's hard for me to not try to make money. For example, it's hard for me to buy this house, the house that we bought. I think why I couldn't build the house we wanted to build was a million dollars. And I defaulted to try to figure out how to make it profitable. Yeah, you told me about that. You instantly were like, can I Airbnb it? How do I make this cash flow positive? Yes. And even the house that I'm in now, I'm doing that as well.

It's really hard not to. But I guess part of me also enjoys it. So I'm trying to figure out how I can build a backhouse that I can use as an office but also Airbnb it. Like an ADU? Yeah. One of those accessories. Yeah. And then see how I can make money on that to pay for the whole house.

The money, it doesn't motivate me, but I enjoy the game. I had a thought two weeks ago about winning the lottery. If you really wanted to do whatever you want to do, during the day? What does that look like? And then really how do you create your weeks to be like that? Whether it's coming and working at a company, I think the people that work at Sumo enjoy it. You know, I want them to give them amazing lives and for them to have their own. And so I think it's like, how do you live like you have the $100 million and just live that way? And so for me, it's like, well, I like what we're going to work on. I get to eat where I want to go eat. I get

to go work out. I get to have hang my friends with you, Neville, all these other people. So I get to live that life. And so it's like, well, if I'm not doing anything congruent with that or that gives me that, what do I want to change? So I'm really living the life that I want. Okay, so here's what comes to mind when I hear that. If I think about what would I do if I had $100 million, first thing that pops into my head are all of these investments that I would make. Isn't that interesting because you don't need to invest anymore? Right. That was your first thought? Yeah. Yeah. I think about apartment complexes that I would buy. I think about like just infusing afford anything with a bunch more cash, like that cash that could be used to hire more employees

and grow the team and grow the whole brand. Those are the first two things that pop into my mind, basically. I'd buy a bunch of apartment complexes, and then I'd hire a really big team to grow afford anything. I think the second one is really fascinating. Because the first one is more that you want security or cash flow around the money. One of the most surprising things from when I became a millionaire was also just hanging out with other millionaires.

This was shocking is that most of these people who are super rich are really concerned with cash flow. They're worth hundreds of millions. Cash. They have that in the bank. But they're like, yeah, I don't have any cash flow coming in, so I'm poor. And it's just like the psychology of it was really fascinating to hear about when talking to those guys. But I think number two for you is actually almost more interesting because what you really want

is that you want personally your message to be heard by more people. And you want the quality of the things you're putting out to be at a higher level. And so the question, I would wonder how do you do that now or how do you get more of that at this point? I think you hit the nail on the head with that, actually. That's really insightful. Yeah. Let's dig on it for a second. Okay.

All right. So you want me to answer that question. Yeah, you're totally right. So apartment complexes, that's cash flow. that's securing the money, that's putting the money in a form where I don't have to tap the principle and I can just live on the income stream that it provides. And really what that is, if I drill down into what's motivating that is it's reducing like financial anxiety. It's so crazy, you're $100 million. There's no more anxiety.

I don't know if that's ever going to go away though. I don't think it does. Like the more I've gotten, I don't, it's not less. Yeah, I'm a, I'm a millionaire. I still have financial anxiety. No, we just pounded it right there. Yeah, we totally did. But yeah, I'm still anxious about money. I'm less anxious now than I was before, not because of the money that I have, but because that for the last 10 years of my life, I have proven to myself that I can make it and I can grow it.

So I'm more confident in my ability to recover from setbacks. And that has alleviated a little bit of the anxiety, but it's definitely still there, even with more than a million. I think a lot of it just to come back, and I do want to hear more about your second piece. I think that's actually the interesting thing, is that I would rather create a lifestyle where I don't have obligations around money or have to worry about it so I can really just keep doing the things I want to do. And this is maybe coming back to the original thing about Facebook, there's nothing I don't have or can't buy that I don't want. I have the microwave I really want. I love microwaves. I have the fridge I really want.

I have a Tesla. It's dope. I don't know. I read the bicycle I like. I think life is more affordable than we make it out to be. You can pretty much live a crazy life without having to make tons of millions of. of dollars. Let's talk about your show.

I got the three. Oh, nice. But if you do it as a business expense, so this is something, we're going to talk about the book. Can I plug the book? Yeah, yeah, plug the book. All right, so I wasn't really working that much last year, so I figured out how to reduce taxes and make more money for myself and the company. And so I put this book together interviewing like wealth managers and tax

strategists and my friends and then doing it all myself. And the book's called Things That Rich People Don't Tell You. And so you can find out on Amazon. It's $100. It's not for poor people. So if you don't have $100,000 in cash in the bank, do not buy the book. If you have over $100,000 and you either have your own company, then I would buy it. And so it's all things I've done.

But one of the things I did is with the Tesla, I put down about $10,000. If you finance it, it's only $700 a month. And the thing that's nice about that is that the way that depreciation works in a business is that we can actually amortize, I think, around $18,000 of the car the year I got it, even though we only put down $10,000. Right, because of depreciation. Yeah. So we depreciated $18,000. Plus there was a tax credit. the tax credit was 7,500.

So if you had to make the amount of cash, the corporate tax rates 21%. So that 7,500 is actually worth like, I don't know, whatever the math is on that for the business. So it was actually like crazy, not profitable, but not as expensive to make the car a company car versus a personal car. So technically you don't own a Tesla, your company does. The company does. It's called sumo car. I think in general, it's much better to try to optimize the upside than the downside. I joked about it with a friend of mine years ago where I was trying to optimize the unsubscribe page on.

AppSumo. And he's like, so let me get this straight. You're spending a week of your time and the team's time to optimize the page for the people who already want to leave. He's like, why don't you just optimize the people that want to stay? And so I think that's true for businesses where why don't you try to optimize the upside instead of just reducing the downside? Because there's a limit to how much you can reduce the downside, but there's no limit to the upside. Right. And I guess just because I had a free time, I had a lot of time to figure this stuff out, and I enjoyed it. All right. So let's talk about you now, have $100 million. How do you want expand to afford anything. I want to hear more. And then what can you do now? Is there a goal

towards where you want to take this stuff? Or if you had more money, what you'd want to be accomplished? Is there more of an out? What we were talking about decision making, is there amount of revenue, amount of readers, amount of listeners, or just more you just want to polish the Yeah, I would want to polish what I've already got. And of course, I would want it to grow. I don't have any specific, like, numeric goals around that. But basically, I want to spend less time managing it so that I can just go deeper into content. You know, the knowledge project with chain parish. So it's my. It's my. favorite podcast. After No King presents. That's number four for you. Sorry, my second favorite podcast

after yours, of course. What do you like about that? His show? He is an amazing interviewer who just deep dives into topics. And the Knowledge Project and his corresponding blog Farnham Street on the surface might to some people from the outside look like an investing blog or an investing podcast, but truly he talks about the art of how to think, the art of how to become a better thinker, the art of how to make better decisions. His is a blog and a podcast that will leave you smarter. So it's not really about investing. It's just about how to hone your mind. That is the type of material that I would like to create more. But that takes time because there's a reflection and corresponding writing and speaking is sort of one camp of work. And managing

and planning is a different camp of work. So I would have more managers and planners and operations people and producers so that I could spend more of my time just in the deep work of reflection that leads to amazing content. Okay, so a producer, a designer, what else? I've got one developer already, although he's not full-time. I'd bring him on the team full-time. Okay. And anybody else who he needs.

So what's interesting is like MPR people, they don't make that much money, right? They probably make like 55, 60. It's not bad money, but it's not like hundreds of thousands. Designer, you could probably get someone internationally, like 55. 75. So how much you actually think it would cost to bring those three people on or even start with some of those three people? Right. Yeah, you're right. Even just trying them out. I mean, like I hired an NPR producer. I think I ended up paying him like $100 now or something like that. It was high, but I mean, the amount of knowledge I got and the benefit of it was insane. And so

to hire an MPR producer and a designer and move your developer maybe to more time. Sounds like you can afford it now too. Damn. I think you got me, Noah. No, I'm not trying to get you. No, no, that's good. I should be hot. I should if you want to. too. I think that's the point. Remember you asked me about going bigger? Yeah. I think that's kind of where this is where I was reflecting on for you where it's like, what do you really want? Do you want it to be more polished? And like for me, with my show and it's my hobby, it's not for you, it is a business of sorts. Like you make money off of it and so forth. I think it's like, well, where do you want to take it? And is this help you get there? I'm not great at this, but it's like, how do you

just try to do more things that compound? Like, because if you either hire people or how to figure out better frameworks of creating better content, then like forever your content's going to be better. and forever your exposure is going to be higher. I'm not great at that, but it's like, how do I do more things that once I've gotten it now just keeps me here, everything else better subsequently. We'll come back to this episode in just a minute. But first, during the holidays, you'll be hanging out with your family and hopefully at some point you'll start having conversations about investing because there might be people

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28% of my ethnicity estimate comes from southern and eastern India, an area that includes Sri Lanka and Bangladesh. Because of migration, that area also includes portions of Nepal. And then 3% of my ethnicity estimate came from Pakistan and Afghanistan. So now I have a much more nuanced look at the migration patterns that influenced my Nepalese heritage. So if that sounds like something that you think would be interesting or that your family might enjoy, you can save big on ancestry DNA with special holiday pricing and spark meaningful conversations around the holiday dinner table. Give the gift that can unwrap their history. head to my URL at ancestry.com slash paula to get your ancestry DNA kit on sale today.

That's ancestry.com slash paula to get an ancestry DNA kit on sale. Ancestry.com slash paula. I think what I've actually thought about more in depth is how do I turn myself into something that's repeatable? What do you mean by that? Well, like Neville, for instance, he loves doing consulting calls. He does them every week and I don't want to do that. But how do I turn myself into a piece of software so that if you want me, you just pay either one-time fee or whatever monthly, depending on what the software is so that you can have it

for yourself. You know, that is what Sumo Mail is. That is what Sumo.com is it's like, if I were to come around your marketing, here are the things that I would be doing. I like the framework of how do I turn myself into a piece of software. Yeah, I never really thought of that before. But yeah, I guess I never thought of in those words, but that's what I think is like, if I could go do the work manually, like what we're doing for swabs and helping them

with their new-mo marketing, if I could do that for all the companies that I've want to help, I would. I just, I don't have the capacity. And so if I can figure out how do I replicate the things that are dramatically helpful for their business and then make that automatic for them, then it's going to be gigantic. So we're coming to the end of our time. What do you want to leave this audience with? I think for everyone out there, you know, I want them to take action. So if they wanted to always do a side hustle, like what is one thing they can do today? Can you go sell something on eBay or Facebook Marketplace or Craigslist? Go sell something. If it's a real estate thing, I know that's something you talk about, like how can you move forward

and like setting up a meeting with a realtor or with financing or going sending out letters. I think the thing that I would highlight about your methods and what I've observed from you is that if you want to make money in real estate, it's not the sexy way. It's not buying some high-rise condo in Austin where the economics aren't that great. Right, exactly. But I think that's the idea of what people want when they're thinking about real estate. But the reality is if you're actually going to make it profitable and be an investor, it's those places that's more appealing.

Yeah, go to Montgomery, Alabama. Yeah, exactly. Go where the profits are, for sure. I think the other thing is really great about what you're encouraging is that it takes time. I think a lot of, even in internet companies, like it took me five years to start making significant money. Significant being the six figures. The first three years, I made less than my job at Intel. But most people don't want to hear that, and they want it to be, you know, overnight riches.

When you say making six figures, you mean gross or net? For my take-home, it was like the six-figure starting to be there. Six-figure take-home. Yeah. It might have been long. So this is year nine. Yeah, I think in years six and a half is when I finally was like, all right, we're not going to go public. No one's buying us.

I might actually want to start paying myself something. And we didn't have that much money to do it. I put everything back in the business. Well, and that's something that you've done that's made you successful and that a lot of people need to do is pay yourself as little as possible, especially in the beginning. Yeah. So that you can continue to reinvest. I mean, I was also fortunate that I had low, you know, kind of in full circle with, I still have relatively low living expenses. But I guess that's just how I've liked to live my life.

made it easier to like, I think first year, I think I made profit, take home 28,000, and the second year was like 40,000, and my third year was 75,000. You know, I was 30 years old, which, you know, and if you're in tech, that's really low. Like, people coming out of college now are making, like, six figures in tech. But I think to the point, one thing you got stuck in my mind, with the whole fire thing is that's become more popular, and that's the word that now, you know, in another few years, it'll be a different word. I don't know if it's to retire early that's interesting, because my parents are retired, and it looks pretty shit. Yeah. It looks really boring. I think people just want independence.

And I think independent, it's more what really, what really, really people want is the ability to choose. That's really what you want. And like, for me, I'm choosing to come to suma.com and work with these people and make this stuff because that's what I think is the most interesting. And, you know, I'll do it for two years and then maybe there'll be something new or maybe it'll still keep working on it. But I think that's what everyone should actually really be striving for.

Not the retire early because what are you going to do all day? Yeah, ability to choose. I think that's really it. And if it's to choose to work at a company, because I think there's a stigma that working for someone is like, oh, they're getting rich off me. It's like, yeah, you can get rich as well, and you can have the freedom and you can live life you want, and a company can help you provide that. And I think it's more, are you, you feel like you're getting to choose that versus it's being chosen for you. And I think at the end of the day with all this stuff, as long as you're

serving yourself well and doing the things that you're interested in, it's really hard to go wrong. If you're buying a property because you're like, I want to work on building a house or I want to try to do an Airbnb or I want to try to, like, fix something up or try renting it. And you're really genuinely interested. I think you're going to serve yourself well. Thank you, Noah. Where can people find you? It's interesting because I think sometimes when people want to get a brand or get known, historically, it's like, let me tell you about myself. Let me tell you about my places. And what I've realized, especially after getting fired by Facebook, is that the best way to get known is create something that benefits other people.

And so app summa.com is where I would go check out, which is daily deals on software for small businesses. And then sumo.com if you want to grow your email list. Nice. And your book is on Amazon. You just search Noah Kagan on Amazon. And don't buy it if you're poor. Thank you, Noah. what are some of the key takeaways that we got from this conversation? Here are eight. Number one, take action.

If you want to start making more money, start a side hustle, start a business, don't overthink it. Just start doing things. Several times throughout our conversation, Noah mentions the importance of just getting started. Gain momentum, be in the right place. You can iterate later, but start. I think the bigger thing was that I just started doing things. Because I think a lot of people that want to have a side hustle or they want to have, you know,

some side income or four. income, it's that they're just like reading the books about it and they're listening to the podcast, but they don't do shit. The thing with the discount card is that I was doing consulting for local businesses at Berkeley when I was in school there. And that led to one of the people I worked with, one of the interns who was like, why don't we do a discount card? But if I wasn't already putting myself in that place, that would have never happened. And so for people who are like, I want to start a set income, literally, I think the easiest thing is go sell something on Craigslist or Facebook Marketplace or eBay today. If increasing your income is a priority,

stop overthinking it and start taking action. There's only so much reading and listening that you can do before it ceases to become effective or before you get trapped in analysis paralysis. Learning through experience is very beneficial. And once you start doing something, your ideas will iterate. New opportunities will build on the things that you're already doing.

And so that is key takeaway number one. Start. Key takeaway number two. Solve your own problems. Oftentimes, entrepreneurs get caught up in the idea of serving others, serving their audience. What can I do for them? What can I sell to them?

What can I offer them? And that's great. Your heart's in the right place. But you might be able to benefit the greatest number of people if you solve a problem that you have and then share that solution. The things that I've done really well and fast followed, frankly, at the end of the day, just solved my own problem. And I saw these Facebook apps as a way that would grow really fast. And I wanted to make $3,000 a month and go work in Thailand. There's opportunistic businesses.

And if you're starting out and you don't have anything, just go do opportunistic stuff. Right. But as you get some stuff going, I think you should be intentional about solving your own problem. So if you look at App Sumo, I was tired of doing the games and I was like, I just want to get cool software to run my company. And then I was like, well, what if I can just promote the software and get a deal on it? And then I just went out and got the software that I wanted. Noah wanted to get software that he could use to improve his own business. And so he solved his own problem.

and in the process, he solved a problem that a lot of other business owners face. And so he created a company out of this idea. He solved his own problem, and then he spread that solution. He did that when he created AppSumo, and then he did that again when he created Sumo.com. He wanted more marketing tools that he could use to promote AppSumo. So he developed those tools, and then created sumo.com as a sister company in order to sell those tools to other online entrepreneurs. So in both of his companies, he first solved his own problem and then shared that solution. And honestly, this podcast is a really good example of that as well.

I want to learn more. I want to deep dive. I want to read books. I want to explore ideas about money and business and life. And so when I'm deciding who to interview or what books to read or what topics to cover, really a lot of times I'm just scratching my own itch. I'm following my own curiosity. If there's a topic that I want to learn about, I will read a book about it and then I will

invite the author to have a one-on-one conversation with me about it, and then I record that and share it. And so that is key takeaway number two. Solve your own problems and then share that solution. Key takeaway number three, the way to build a stronger network is by helping others. During this conversation, I mention that Noah's ability to pick the right people is one of his core strengths, and Noah, in reply, gives two tips to build a better professional network. First, he advocates helping others rather than asking for help. I think the bullshit answer that no one wants to hear is that I went out of my way to figure out two things. But number one, who can I go up and help?

That one's always hard because it's really easy to want to ask things all the time. Like let me ask Paula for like real estate advice. Let me ask Noah for marketing or startup advice. And I think with a lot of these people, it was like, how do I help promote them and whatever their interests are? So that's his first tip. Approach new people not by asking what can you do for me, but rather what can I do for you? That's a great way to form relationships in business and in life. And his second tip, which is closely related, is that when you are approaching people,

focus on surrounding yourself with people who are smarter or more skilled than you are. Look for people who impress you. The second thing in terms of the people I'm surrounding myself with are looking for, I'm generally just looking for people that impress me. The word is wow. And so the thing that I'm still doing today is that when I see something that impresses, me in any level from like a website to a book to anything, I just reach out to the person. And it literally could just be a compliment. So that's the second tip. Reach out to people you admire

and let them know. Be brief, but let them know that you appreciate their work and let them know why. When you find people who impress you, see who they're hanging out with. Smart people often tend to surround themselves with other smart people. So reach out to the people who impress you and reach out to the people who are in their circles and come with a spirit not of making requests but rather offering the help if you can. And by doing that consistently over time, you'll develop a much stronger network. You know, the thing is networking often has a bad connotation to it. It has this transactional connotation.

Really, it's developing relationships. You could hear from this interview, Noah and I are friends. And good networking, authentic networking, is that. It's forming friendships. So be authentic, be helpful, be a friend. That's the key to good networking. So that is key takeaway number three. Key takeaway number four.

Stay true to yourself and your business. Noah describes how in both his personal and professional life, he always circles back to what does he want to do? What is enjoyable for him? I don't have an ambition to go public. I don't have an ambition to be a billionaire. I think it just has to be genuine. And what is genuine, right?

Like, what is your true self? It's just like doing what you want to do. And I think that's what fire really is where without apologies and without permission, I can actually do the life and the work that I really want to do. And so I don't think about going bigger. I think about going smaller personally. And I think like with Sumo, I don't, you know, the guys have come to me. One of the guys came a few months ago.

I was like, let's build a $50 million business. And I was like, why? What's the difference between what we're doing now in a $50 million business? And I think it's not that it's bad. I don't think making more money is bad, but is it doing more of the things we want to do? Do we keep getting to run the company the way we want to run it? That last part, do we keep getting to run the company the way we want to run it? It's a simple but very powerful question.

That's a question that helps you make sure that you're operating in a way that aligns with your values. And if you replace the word company with the word life, the statement stands, do we keep getting to run life the way we want to run it? And you're likely to have the most success at the thing that you're genuinely into. And so that's key takeaway number four. Be honest with yourself and be true to yourself about what you really want. and go after that, even if it's not what society thinks you, quote, unquote, ought to be doing. And that leads perfectly to key takeaway number five, which is to think about what you would be doing if you weren't getting paid.

What would you do every day if money wasn't an issue? What would you do even if you weren't getting paid for it? What are you so fired up about that money isn't a motivator? You can use your answers to these questions to find more fulfillment today or to figure out, if you're on the early retirement track, figure out what you want to retire into. I think generally, like for me, I've made the most money and had the most fulfillment when I've just done the things I really wanted without the intention of just trying to make money. I think when I've put the money first is when I've made least money or it's been the fastest

to quit. When I'm doing something without the point of money, it's very hard to stop me. It's hard to stop if it's just something that you want. I think for everyone that's listening, you can think about, okay, what is something you're really proud of accomplishing? And generally when you think of something you're very proud of accomplishing, there's two key things. Number one, you really wanted it.

And number two, it was hard. If you want to be fulfilled by your work and proud of your accomplishments, then, as Noah says, there are two key things. Number one, you have to really want it. You have to genuinely want it, which means that you're not doing something because you think it'll look good on a resume. You're doing it because you want to be doing it. That's number one. And number two is that it has to be hard. It has to be challenging. And so that's key takeaway number five. Fulfillment comes from taking on challenging projects that you enjoy enough that you would be doing it even if you weren't getting paid, even if money wasn't. the point. And closely related to that is the sixth key takeaway, which is to try the following

thought exercise, how would you live if you had $100 million? I had a thought two weeks ago about winning the lottery. If you really wanted to do whatever you wanted to do during the day, what does that look like? And then really, how do you create your weeks to be like that? Whether it's coming and working at a company, I think the people that work at Sumo enjoy it. You know, I want them to give them amazing lives and for them to have their own. And so I think it's like, how do you live like you have the $100 million and just live that way? And so for me, it's like, well, I like what we're going to work on. I get to eat where I want to go eat. I get to go work out. I get to hang my friends with you, Neville, all these other people. So I get

to live that life. And so it's like, well, if I'm not doing anything congruent with that or that gives me that, what do I want to change? So I'm really living the life that I want. So give yourself the space to think through this. What would you do if you had $100 million and what's at the root of that? What are you actually trying to do? For me, I wanted to buy a bunch of apartment complexes and I wanted to infuse afford anything with a lot more cash so that we could grow the team.

What's at the root of that? Well, the apartment complexes, what's the root of that is wanting financial security, wanting cash flow, wanting to lock up the principle and keep it intact so that all I'm spending is the income stream. So the desire for security was at the root of that. And in terms of infusing afford anything with more cash, the root of that was spreading a message that I'm passionate about and hiring awesome people to help make that a reality. And so really the answers to the questions, what would you do if you had $100 million?

It's not about the initial answer itself. It's about look at the root of it. What are you trying to get to? And then how can you make that happen right now? How can you create greater financial security right now? How can you spread a message that you're passionate about right now? How can you work with awesome people right now? So ask yourself that question, the what would you do with $100 million?

As a thought exercise, get to the root of the answer and then use the root of the answer to decide what you're going to do today. And remember, for Noah, that $100 million question is not purely a hypothetical. Noah missed out on $100 million when he got fired from Facebook. So you can imagine he spent a lot of time. thinking about what he would have done with that money and the clarity that he got from answering that question for himself has helped steer him to where he is today. And so that is key takeaway number six. Key takeaway number seven, optimize the upside. A lot of people protect against the downside, but very few optimize the upside. Yet that's where the opportunity is. It's much better to try

to optimize the upside than the downside. I think I joked about it with a friend of mine years ago where I was trying to optimize the unsubscribe page on App Sumo. And he's like, so let me get this straight. You're spending a week of your time and the team's time to optimize the page for the people who already want to leave. He's like, why don't you just optimize the people that want to stay? And so I think that's true for businesses where why don't you try to optimize the upside instead of just reducing the downside? Because there's a limit to how much you can reduce in the downside, but there's no limit to the upside. There's no limit to the upside. There's no limit to the upside. There's a clear parallel here between that age or debate between reducing your expenses versus increasing your income.

Sure, you shouldn't be wasteful. And cutting back on your spending can help put you in a better financial position. But you can only reduce your expenses so much. So once you get your spending under control, then focus on the income side of the equation because there's no ceiling on your income. And that's just one of many examples of this broader concept of optimizing the upside. In every vertical of your life, your health, your relationships, your business, your money, where can you make the biggest impact? Are you spending your energy on the things that will move the needle the most? And are you spending your energy on things that will have a compounding effect over time?

And here's how Noah describes this. I'm not great at this, but it's like how do you just try to do more things that compound? Like, because if you either hire people or how to figure out better frameworks of creating better content, then like forever your content's going to be better. And forever your exposure is going to be higher. And so that is key takeaway number seven. Optimize the upside and focus on the things that have the potential for the biggest results and the potential for compounding results over time. Finally, key takeaway number eight.

The fire movement, financial independence retire early, is really about having the ability to choose. I don't know if it's the retire early that's interesting because my parents are retired and it looks pretty shit. It looks really boring. I think people just want independence. What really, really, really people want is the ability to choose. For me, I'm choosing to come to suma.com and work with these people and make this stuff because that's what I think is the most interesting. You know, I'll do it for two years and then maybe there'll be something new or maybe it'll still keep working on it.

But I think that's what everyone should actually really be striving for. Not the retire early, because what are you going to do all day? As Noah remarks, once you reach financial independence, you have the ability to choose. And sure, that might mean starting your own business, but it could mean continuing to work for an employer. Ignore the early retirement police that say that there's a right way or a wrong way to do it. If you enjoy working for your company, keep working for your company. The difference is that you consciously choose that life rather than feeling like it's been chosen for you. And so that is the eighth key takeaway from this conversation with entrepreneur Noah Kagan.

If you want to check out the show notes for the episode where we have detailed notes about all of these takeaways, plus links to everything, every resource that we mentioned in today's interview, you can find those show notes at Affordanything.com slash episode 228. That's Affordanything.com slash episode 228. If you want to discuss today's episode, head to Afford Anything.com slash community. We have a great community there that talks about everything from personal finance to self-improvement, to financial independence, to health, to travel. So head to Afford Anything.com slash community, join our community. It's totally free and join in the discussion. If you enjoyed today's episode, please do me a favor. Please leave us a rating and a review in whatever

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