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Noah Kagan

By Noah Kagan

In this interview, Noah Kagan outlines why building relationships through education marketing is key for growing your startup.

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“Help and educate your user in a way that has not been done before. Don’t follow the status quo of just blogging boring content. Stand out and go the extra mile in educating them. In return you will position yourself as the go to place.”

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Noah Kagan is the Chief Sumo of AppSumo, a daily deals site for web geeks. He worked as product manager at Facebook and was one of the first employees. Before that he was director of marketing at Mint. Noah’s blog, OkDork.com, focuses on the topics of marketing, entrepreneurship, and engagement with online communities.
Founder of AppSumo
Lives in Austin
UC Berkeley
Purple Cow
Alfred App
Andrew Chen
Noah Kagan is the Chief Sumo of AppSumo, a daily deals site for web geeks. He worked as product manager at Facebook and was one of the first employees. Before that he was director of marketing at Mint. Noah’s blog, OkDork.com, focuses on the topics of marketing, entrepreneurship, and engagement with online communities.

Noah Kagan - Marketing Through Education

Noah Kagan
In this interview, Noah Kagan outlines why building relationships through education marketing is key for growing your startup.

N.B This is the unedited transcript of the interview.

Can you introduce yourself?

Sure. I'm Noah Kagan, Chief Sumo at Appsumo.com, semi-professional disc golf player, based in Austin, Texas.

Today we're going to talk about education marketing. First of all, can you define what it is in your own words?

Yeah, education marketing is the act of building an actual relationship with visitors and customers for your business.

I have a business. What's the next step for me to take this approach to marketing by educating? What's the next step? Do I just blog? Yes, so where do I go from there?

Let's do Dorm Room Tycoon specifically. I think that what happens with marketing is, Seth Godin would have put it as interruption marketing. A lot of other people just do transactional marketing which is like, "Hey, come buy my thing. Hey, come do this for me." Education marketing is actually the reverse of that where you start figuring out who your audience is, what they want, what will benefit them and help them and then creating education around that to build a relationship. For Dorm Room Tycoon, who do you describe as your audience?

People that want to start businesses, people that are following the guests that I interview. The demographic is very young, male, based in the Valley or in the east of America and probably London.

Got you. Exactly that. What you're doing now is creating education and building a relationship of trust which is providing solid content to those people, instead of messaging like, "Hey, come buy my thing" or "Read my blog post." Most people don't, there are billions of blogs. You're going to certain well-known people and leveraging their content. That should be very educational for your audience. Hopefully, you're actually leveraging some of their audiences. Education marketing is just reverse marketing, instead of asking for something, you're trying to give something away and start to build a relationship with a visitor or a customer in your business. 

Before we move on, how does somebody get a good understanding of who their audience is?

I'll give you the generic cliche one that everyone else is probably going to give, what I'd prefer is if the customer is myself. With AppSumo, it's very simple because I am that customer. I do buy those products. I support them, endorse them or don't. A lot of people actually like us because we help discovery. With Dorm Room Tycoon, what you can do is talk to the people you see on Twitter, take their names, they're generally on Facebook. Take their names they're generally on LinkedIn, search on Google. I candidly research a lot of the people that are involved with App Sumo because I'm really curious about them. I'm like, "Why do you like us?" Or, "Who are you?" I actively spend my time manually looking up people. I think you can automate that. That's a part-two-kind-of story. I would say you build stuff you personally use yourself and are really enjoying. Secondly, look at the people who are following you on Twitter, who are emailing you about certain things and then research them actively in those different locations. 

Then how do you aggregate that?

I think you can write a script to take those names and then create something on Google Docs. I think for now you manually create a Google spread sheet and then start tracking some of the different categories that are high-level about your customers. Specifically the top ones are male-female, profession, location. So web designer, North America. Age group, interests. Either on Facebook or maybe on Twitter you can see that they like tacos. Then what you're trying to do is create a customer profile around who that ideal person is. With Sumo it's all dudes, like 95% of our audience is male. If we put the site in pink or if we created like the copy or the positioning around more female-related things or our advertising to female-related people or even education to female-related people, it's a total flop and a total miss of who we need to be promoting to and educating. 

What about those guys that have a business where they just want to sell something? How do they do the same thing that you're doing?

Yes, I've talked about this with Manpacks.com which is an underwear company. Let's look at it mathematically. If you're going to have someone come to your site and you sell shoes and 0.5 – 1% visitors buy, that’s a very small conversion rate. If you're trying to do education that benefits the actual audience, you're probably going to get an interaction around 5 to 25%. You’ll actually build a relationship and trust someone who will then come and spend a lot more over their lifetime because you haven't just tried to sell to them, you've tried to actually educate them.

What would you educate them about?

For a shoe company I think you can talk about what are the latest shoes coming out. So that's part one. Also you can just show the shoes or you can tell the story behind the shoes. The second part could actually be like a lifestyle education. I'm really into disc golf. The education could be about doing things outdoor. The education could be disc golfing tips. It's funny, this guy was emailing me yesterday about he's creating a business, "Oh, we do games for web sites. We're going to have game stuff so you can make more money." Instead of just focusing on the game stuff, I was like focus on the outcome stuff which is "the make more money." The engagement, the retention and the things that your audience would really want versus things that are benefiting you, which is like, "Oh, here's a thing about these pair of shoes and why you should buy them."

I understand exactly everything you're saying. I think the concern for a lot of people is the first thing is to jump up and integrate Tumblr or Wordpress into their site and start blogging. It's so easy just to fall in the trap of a "me too blog" where nobody pays attention. How can you increase that stickiness where people actually read your blog or they read the stuff that you're trying to educate them with?

The problem is most people do it without some type of objective and some type of understanding if what they're doing is on the right path. They say, "Oh, I've got to a blog because 37signals did. They have 100,000 people." You're not them and you'll never be them.

What happens is when you get to their level or a similar level, it's like, "Yeah, you start blogging. You put up this great stuff and everything just works." It's like, "Well, shit man, yeah, but I have nothing today."

I think what people really have to do is probably a few things in terms of how do you start. One, you may not need to do a blog. It may actually be videos, maybe another form of content. I think that's number one. I don't think, there's not one way eat a Reese's Pieces or a Reese's Peanut Butter Cup. Do they have those in London? Reese's Peanut Butter Cups? Oh, they're delicious. When you come to the States, I'll buy you one. I think the thing is to try to understand who the audience is, what they want. I think in the beginning, you really need to connect on an individual basis. I know at Mint.com, the first thousand people I emailed.

How many hours did you spend doing that?

I don't know if it was every single one, but I went out of my way to be like "Man, thank you so much." Really going out and actively connecting with people. Going to other sites that were similar ...

going to groups on Facebook, groups on Google versus Yahoo, searching Twitter for certain people. Then one-on-one build up that audience. Secondly, I think you need to have I think until you get your thousand people, you spend all the time on that. I probably spend at least an hour a day. Even now, I spend probably about an hour a day just looking at people who are buying things from AppSumo, who are talking about it, just to try to understand who they are, what they think, what they fear, what they are really trying to accomplish, how we can help them better, what sucks, what are their challenges outside of AppSumo. I look at them on Facebook, I do the things I was mentioning earlier, I think that really gives me a better understanding of who we are helping or serving.

One thing I realized, this happened at Facebook a bit, and I'll come back to the original question, when you start building a business, you look at people as numbers. "Well, all right, I had ten new users today." I learned at Facebook, one, there not "users," they're people. And those ten people at that site, that's ten humans. I got to meet a few people that are on AppSumo that have bought from us and are on our newsletter, and I'm like, "Wow, you're real and you have your own challenges. You actually breathe and you talk to yourself." That was fascinating for me. I think people get away from that when they start building web businesses, because you don't see your customer. 

Coming back to the original question, I think connecting 101, new forms of content. I think you need to, instead of just putting out content and hoping people read it, you need to go and make sure that you ask your customers "Hey, what are your biggest challenges? What things do you want to be reading? What do you want to be learning?" Then actively going out and promoting it those people. Ultimately making sure you have an objective that is being reached.

But remember, there are tons of content. Let me give you an example from AppSumo, because it's easier for me to just do it because I know it, I was noticing online that there was all this, I would say, light content. Light content is an article that says, "How to increase your business 10%." You go and read it and it basically is 500 words about how they changed a button or how they improved their sign ups or some shitty thing that I didn't think was applicable for me or for other people reading it. But it's very stimulating. But I was like, “Okay, why don't we do hour-long content on video with a screen test showing how to actually increase your revenue 10% or showing you how to blog”. We spend a few thousand dollars making that content every week in our free action videos that we give away every Friday. That's our education marketing. Or we put out content that's not available, that you can't just go and cheaply get anywhere else. Yeah, no one else is going to spend almost two thousand dollars to make a video, find the experts and produce them, but they can write a really quick, cheap blog post. That's what we found for ourselves is a valuable way to educate people and provide them something where it builds a relationship where we're not just saying, "Hey, come buy our stuff." We're going to give you a lot of stuff and if you want to buy something, cool, if not, that's just as cool too. Maybe tell somebody about us.

Let's talk about where they can further their knowledge on how to educate their audience.

Yeah, that's a great question. I think that there's a lot of different sites to do that. Hubspot, they actually call it inbound marketing, which is one method or a similar way to call education marketing. There is a podcast called Ilovemarketing.com. It's a little shady, it's kind of info-marketers, it's kind of like reading the book The Game where you read The Game, are you familiar with The Game?

Yeah, Neil Strauss.

So the book is about how to, scientifically almost, pick up women and have sex with them. I don't think that's necessarily what I want to encourage, but what I liked about The Game is there are underlying principles that can apply to running a business. Ilovemarketing talks about a guy who did housecleaning, so you think "Housecleaning, what the hell could you do with housecleaning?" He actually gave people ten things you should know before you hire your next house cleaner.

I know that guy, that's Joe Polish, right?

Exactly, Joe Polish. I think his stuff is phenomenal around that. Can I share a personal story?

Sure, go, go, as long as it's useful.

Noah Kagan: I'm a disc golfer. I'm decent, I'm not the best. I'm trying to go pro one day. I went to my local disc golf store and I said, "Hey, I'm looking at disc golfes." They went through the disc golfes and they educated me. It was okay and that was that. Then I said, "Hey, do you do training or anything? Do you do teaching disc golfes?" And she was like, "Sure, sure. It's $30 a lesson and let's set it up for next Wednesday." So we did that. She taught me. I paid her, but she taught me how to do something. I was like "Okay." Then I did it again the following week, paid another $30 and she taught me. At that point, I trust her, because she hasn't sold me anything. I'm paying her for the lesson, but she's teaching me. What I realized was when I went in the disc golf store, I was like "What disc should I buy? Tell me what to buy." That's because we had built a relationship instead of her just trying to sell me on "Oh, here's the disc you should get today." I felt like she tried to understand me, she helped me. So it was a much easier decision for me to look to her to help encourage my buying decision.

It's so much easier to build a relationship when it's one-on-one and it's offline. How can we replicate that online? What else can we do so we can build that trust online?

Basically anything that is going to benefit your person. Think about anybody who is going to benefit your visitor without asking for anything. I think Seth Godin talks about that a lot. Where he's likeI don't want anything, I just want to give this away for goodwill. If you just give something away that's shitty, that doesn't build a relationship. Think about the things offline that you could parallel. The teacher in the disc golf educated me on how to be a better disc golfer. If you are doing Manpacks, educating people on how to get laid more often or how to go a whole night of drinking without a hangover and creating either videos or podcasts or posters or mailing cards or, I guess you could do, blog posts or white papers. It could be anything like Zappos could do a lot of that around all of their content, around all their shoes, like creating content and videos or funny things around running shoes.

That's the kind of the thing where let's say Dorm Room Tycoon, if I was selling dorm room stuff or if I was, like even for Appsumo. Appsumo sells tools for startups, so we sell webtools to startups succeed and kick ass. We could do a podcast that goes through and talks about the people, what tools they like to use, what things helped them be successful. We help make our customers successful through those podcasts, like Andrew Warner at Mixergy. He goes and educates tons of people for free for two years and now he starts saying, "Hey, I've put out a lot of great stuff and you all benefited from it. And now I'm going to ask for a little bit of money." Talk to the people who know Andrew, they know him because of Mixergy, they are fervent, they are crazy. They are like "I love Mixergy. I'll kill for Andrew Warner. He's my God." And that's because he spent so much time giving them things that have made them better. Now when he asks for something, they almost feel guilty for not giving him money. Like the Hare Krishna, they give you the book. They say, "Here's the book for free."

And then they ask for donations. (laughs)

It's a little weird but it's that reciprocity of education and giving value. Theoretically, it should be genuine. That would probably be the best part, not just like, "I'm just going to do these free education things then I can get more money out of you." Something around "I really want to make them better, which subsequently, makes me better."

Now my concern is, can't that actually distract you from your business?

Number one, you need to create a business people want. You can do all the education marketing you want around a piece of poop, but it's still going to be a piece of shit. You need to get that part right before you, this is like you have something people want. Let's say you have created a product or created a website or created an offline business. Then once you have that, you know that people want it, you can start marketing it and getting people to know about it. I think to get them to know about it is where education marketing is the future.

Who does this really well?

I think there is a lot of people. Like Remit Sethi, from Iwillteachyoutoberich.com. He's put out content for seven years. His content is phenomenal. He's Stanford educated, Wall Street Journal. He started a big company. He's put out so much amazing content around educating people about personal finance. Now he's educating them about living a better life or being a better freelancer. He's transitioned from educating you for so long to "Hey, I'm going to start charging for some things." He had some haters. He had a fair amount of haters, but he also had a lot people who were like "Yeah, man, you've really helped me a lot. And I want you to help me more."

Good advice for those want to do the startup is go to the audience first before they actually try to startup?

I think people are also kind of wussies, where if you want to build an audience. One, you have the product, but to build an audience you have to be okay that's it's going to take one year of hard work. I think most people put out a blog post that sucks, no one comes and reads it, and they're like, "My blog's stupid. I hate blogs." It's not actually that. You're going to have to go write it. You're going to do guest posts. You're going to have to go promote things. You're going to have to go kiss people's ass. You're going to have to go do stuff that fails. And then if you're willing to commit six months to working hard, you will get a positive outcome. Or you will at least get something that you are learning from that.

Is that what you did? Did you do guest posts?

Guest posts are kind of one-off thing, so I don't know if it is a scalable marketing tactic or strategy. The idea there is that marketing and trying to promote your business is hard work. It's going to take six months to a year to find out what kind of system or what kind of methods are effective and really working. Most people do it and it will fail. They're like "Oh, this is stupid. I don't really care." Or their product sucks so there is no amount of marketing that will help them. You need, I always say the Jewish Mother Syndrome, you need to be really persistent. My mom is very persistent, she's, even to this day, she still reminds me of things. You need to make sure you have part one before you go ahead and generating all the marketing stuff.

Let's talk about persistence. If somebody says, no, do you give up?

It's like with Guy Kawasaki. I was running conferences about four or five years ago. It took me two years to get Guy Kawasaki to speak but I stayed in touch with him. I followed up with him. I tried to help him. I just assumed it was going to take a year or two, and was just patient.


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