Business Growth Tips: How I’m Growing My Software Business by $100M

How I’m Taking My Software Company To The Moon ($100M & Beyond)!

In the last 11 years, AppSumo has experienced massive business growth from a small weekend side project into a $100M company.

In this post, I share some of the strategic decisions we made to grow AppSumo, and the different areas you need to be thinking about if you’re planning to scale your own business.

Let’s dive in.

How I’m Taking My Software Company To The Moon ($100M Business Growth & Beyond)!

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Business Growth Tip #1: Strategy

What changes have to happen when you want to go from a side hustle, to a small business, to an almost billion dollar company and beyond?

First off, I made product bundles.

I'd go out and negotiate all these deals, put them in a bundle, and sell it for $50 bucks.

That worked pretty well, but it was a lot of time chasing people around and essentially, herding cats.

One day, Andrew Chen — who's one of my best friends and advisors — said, “What if you just sold the deals individually? He broke down the economics on a spreadsheet and showed me how people would buy more if we sold each deal individually, so they could just buy the tools they wanted instead of the whole bundle.

So we broke down the bundles and sold each deal individually.

And it created a dramatic shift.

It caused the business to go through its second phase of growth, and we went from $300,000 our first year, to $3 million dollars in our second year.

That meant that we needed a bigger team. So we hired a sales team and that's what really helped take us into our third phase of growth, taking the business growth from $3 million dollars to around $10 million dollars.

To uplevel from there, we wanted to get more deals on the site and more products on AppSumo, so we opened up the sales team to thousands of people by creating the AppSumo Marketplace. Anyone can sell their digital products on the AppSumo Marketplace (yes, even you!).

Creating the AppSumo Marketplace has taken us from a $30 million company to a $100 million dollar company.

How to Create Your Own Strategy

Your strategy should be really simple to explain.

The strategy for AppSumo was pretty much to always get more partners, but we changed how we did it over time.

The second thing is to think about what your goal is and the most effective way to reach it.

Doing bundles wasn't helping us grow, so then we sold individual deals. Then our sales team could only sell so many individual deals, so we opened AppSumo up so ANYONE could become a salesperson.

Think about how you can adjust and evolve your business to grow and scale that over time.

Business Growth Tip #2: People

The most important thing in literally every single company is people.

You're not going to scale your business without people, no matter how many employees you have. Whether you're just starting out and it's just you, or you have 10 employees, or like us — we have over 100 employees which blows my mind — or a company like Facebook that has somewhere around 45,000 employees!

People make the difference.

No matter how big or small your business is, I think you should practice hiring people. Find the highest-value people that you can, and get them to fill the gaps in doing the work that you’re not the best at or don’t enjoy doing as much.

Frankly, you'd be surprised what other people actually enjoy doing.

Key Hires You Need to Make

  • Home Grow Your People: There are people that just love being a part of AppSumo, and they've been there since the beginning, and they've earned their place in the company
  • Hire From The Promised Land: You don’t always have to reinvent the wheel. Hire people who do the things you want to achieve! Don’t always figure things out from scratch. Just hire the people with know-how.
  • Hire For Your Blind Spot: Hire the people that will shortcut the problems that you’re having. At AppSumo, one of our problems was operational experience. We didn’t have anyone who scaled a company from $100 million to say $400 or $500 million, so we hired someone who had done that to fix our blind spot.

Business Growth Tip #3: 5-10 Year Planning

Now what we're doing to go from $100 million and beyond is thinking long-term.

We normally do 1 year planning, but now we're transitioning to 3 and potentially in the future even 5 year or 10 year planning. Companies like Amazon do 10 year planning! I've talked to people who worked on the Amazon Echo, and they said they worked on it for something like 4+ plus years.

As a startup, everything is in fast mode. If things aren’t done in a month, we might think they’re not working. But the reality is, big projects and big successes take time.

Business Growth Tip #4: Re-Invest Income

The other thing we copy from Amazon is we aim to have $0 dollars in profit at the end of every year.

I know that might sound weird, but our goal is to reinvest all the money back into the company so that each year is bigger and better than the last.

Like I said, we’re just copying what works for Amazon, and I like the idea that each year is bigger and better than the last.

Business Growth Tip #5: Products

This is one of the secret curses of entrepreneurs, where you think this next new product is finally going to be the next biggest thing for your business.

Over the years at AppSumo we've launched:

And a bunch of other products.

It’s 11 years later, and AppSumo is still the main driver. The revenue from our other products is probably less than 10% of what we make from AppSumo.

The thing I'm really trying to tell you here is, if you found something that works, there's so much more meat on the bone than you realize.

If you’ve found any product/market fit in your bakery, in your software, in your SaaS — whatever it is — really run up the score! You might feel like you’ve reached 100% market penetration, but the reality is that almost no one has.

So keep going.

Another thing we're thinking about with AppSumo’s product range is, instead of trying to create all these new products all the time, how do we actually build a flywheel around AppSumo? Which basically means creating an ecosystem of products that complement one another and create a ton of value when used together, rather than just using one.

You can do this in your own company.

Business Growth Tip #6: Marketing

The simple takeaway here is: think about how to build marketing into your business.

As much as you think the next new product is going to make a bunch of magic for your business, it’s probably not going to.

And as you want to scale out your product, you only have so many people. That's why so many businesses do affiliate marketing. You only have so many people and so much money. So how do you build marketing into your business?

How do you build it so around the clock, your company is just getting better and bigger automatically?

For example, when someone heads to AppSumo, they can list their product on AppSumo Marketplace and as they promote their business, it not only helps them out, but it helps us too.

The same model works at Amazon and a lot of other successful marketplaces.

Business Growth Tip #7: What Other Business Models Work?

Another thing to consider with your business’ strategy is, what other business models work really well that you can replicate?

Maybe it's not even in your industry.

Look at marketplaces like Etsy, Ebay, and Amazon — the same business models work in other categories.

Business Growth Tip #8: Do More of What Makes You Grow

For us, we were really focused on getting more customers to help us grow. So we tried a lot of different methods to draw partners to the AppSumo Marketplace. Eventually, what worked is doubling down on what we did to get the first 100 partners, and just doing more and more of that over time.

It’s SO simple.

But it’s probably one of the keys to AppSumo’s success that I don't think other people keep doing.

Business Growth Tip #9: Mission, Vision, Culture

One thing that really surprised me that helped take AppSumo to a $100 million and beyond business is…

Mission, vision, and culture.

I remember when I worked at Intel and they talked about culture and mission and vision, and it just sounded like corporate bullsh*t to me.

I don't know if it seems that way to you, but as the CEO of AppSumo, I’ve noticed how the more employees you get, the more communication breaks down.

And that’s really fascinating to me. Because when you’re a small group, it’s easy to just talk to someone and ask what they think about something but as you get to 10 people or 25 people or 100 people, it’s not that easy.

There’s more layers and levels.

And so encouraging the right behaviors today when no one's around helps set a standard of excellence in your company.

That’s what a mission, vision, and culture are for.

Culture is important because it defines who should come and succeed at our company, and then once they’re here, the mission and vision tell them how they should be behaving.

And how you know it's working is when you're in meetings, or when you're not around, and things come up, your employees ask themselves something like, “How should we behave? Is that aligned to our mission, vision, and culture or not?”

By having a well defined mission, vision, and culture, they should be able to choose the right path that’s aligned with the company.

At AppSumo, our culture is “Stay scrappy.”

Yes, we’ve made money and we do have profit, but are there ways that you can still ask for a discount on whatever we’re working on? At Sumo, our culture is “Looking out for your best interest.” So in our company, we want a culture that looks out for the people who work there.

For your company, how do you encourage certain behavior so that as you grow and you can't tell everyone what to do, people know how they should be behaving at the company?

Final Thoughts

Here are some of my final thoughts as I’m learning how to scale AppSumo to a $100 million dollar business and beyond, because I’m definitely still learning a lot!

Fear of Failure

I'm afraid of messing this all up.

Which is also maybe a kind of imposter syndrome, but I’ve never done this before, so how do I know I can actually do this?

But on the other side of that, I think that when you're pushing boundaries and you're trying new things, you're gonna make mistakes. Mistakes mean that you're trying something new.

If it didn't make a mistake, you've probably already experienced it before, and that doesn’t help you grow.

Consistency

One of the things I'm really working on is consistency.

I've noticed in some meetings that I'm really productive and effective, and in other meetings I can bring in an emotional state that’s not helpful.

So what I'm doing about it is I review myself after every single one of my meetings, and I ask people to call me out if I'm being inconsistent. In a lot of my meetings, I ask people to give me feedback on what they think I'm improving on and what they want me to do better at.

Think Big Enough

I don't think that I actually think big enough.

When I met Bill Gates, I asked him 2 questions and one of the questions was, “Is this what you imagined your life to be?

I don't actually remember his answer (which sounds kind of crazy) but for me, I never thought AppSumo would go beyond $3,000 dollars. I just tried to make $3,000 a month promoting awesome products on deals and tools that I wanted for myself.

Think about for yourself what narrative isn't serving you today, that will serve you better in the future if you let it go.

For me, I’m more excited than ever about the customers and partners we’re serving and figuring out how to run a company of this size.

It’s personally been one of the biggest growth phases of my life, so I'm excited to be able to keep digging in, showing up, and putting in the work to figure out how to actually grow this company because I feel it spilling over and being a positive influence in all parts of my life.

I hope for you — whether you're going from $0 to $1, or $1 to $1 million dollars, and beyond — that you have a great time starting and growing your own business, and that this helps you on your own business growth journey.


 

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