$21,243 in 8 Days: Why AppSumo is Going to Keep Crushing It

http://www.clickminded.com/why-appsumo-is-going-to-keep-crushing-it/

by trg2 • 14 years ago

83 48 14 years ago

louhong• 14 years ago

This is great, thanks for the breakdown. Never dealt with Noah or the AppSumo guys but I get all their emails. Really nice to know there are guys behind it all and they're being conscientious with what they are sending out.

BallinBige• 14 years ago

Nice backlink to PayPal.com :)

unreal37• 14 years ago

Very interesting review. I also get the AppSumo email (although rarely read them any more), but good to see people are seeing much success with it.

nathanbarry• 14 years ago

I've heard that AppSumo's percentage is as high as 75-80%. Is what you got for your product?

trg2• 14 years ago

Not sure if I'm allowed to talk about commission percentages, so I will refrain. However, I can reiterate that the commission rate is extremely high, but has proven to be well worth it.

arkitaip• 14 years ago

Why shouldn't you be allowed?

stevencorona• 14 years ago

I read the article and now all I want to know is what % AppSumo takes. Super high like.. 90%?

manuelflara2• 14 years ago

I think Groupon takes 50% and it's mostly actual physical products (like a meal at a restaurant), so I wouldn't be surprised if AppSumo takes something like 70%.

tbrooks2• 14 years ago

It's no secret - 50-75%

rjsamson3• 14 years ago

I actually picked up a few great deals from AppSumo right around the time they launched, but I feel like the quality content / products offered through there has gone down significantly over time - this is not a knock on the OP's course, I'm sure its quite good, its just that AppSumo used to have great stuff - I used to look forward seeing what they had each week - and now when I get their emails its kind of 'meh'.

Or am I the only one who feels this way?

manuelflara2• 14 years ago

I feel the same way. I used to look forward to discounted web apps. Through AppSumo I actually got to know one of my favorite ones that I use every day, all day: Freckle. I also found out about other discounts to web apps I had considered subscribing to but I didn't have a reason to do it now. Well, a time based huge discount is a good reason! Now it seems it's mostly the same online courses all the time. Copywriting, launch your business, etc.

taskstrike• 14 years ago

Feel the same way, now it's a site for trashy info products instead of actual useful software on sale.

Probably the margin is higher selling to people who want to know "the easy way" of starting a startup.

run4yourlives• 14 years ago

This is the first time I've ever visited AppSumo, and my first impression is that it seems to be a collection of - overpriced - get rich quick schemes and apps of a dubious value.

A shame because the basic concept seems to be a great idea.

OzzyB• 14 years ago

So if AppSumo does take a hefty commission in the 50%+ 75% range (as mentioned in other comments here), that would pretty much explain the decline in quality of goods offered.

I personally wouldn't mind selling my (imaginary) e-course/book and only get 25% of proceeds -- for other, more tangible things, not so much.

Not knocking the story though, interesting stuff.

dangrossman• 14 years ago

My AppSumo purchase history:

* Lean Startup Bundle (2010)

* MixPanel Lifetime Account (YC Week, 2010)

* GinzaMetrics Discount (YC Week, 2010)

* Optimizely Discount (YC Week, 2010)

Then not a single discounted app or physical book in 2011 or 2012, despite remaining on their mailing list all that time. I haven't seen any interesting offers since then, just "action videos" and other infoproducts.

rjsamson3• 14 years ago

Glad I'm not alone! AppSumo is actually where I bought Sparrow - an example of the quality stuff they used to have on there. I'd love to see them go back to their roots...

wildmXranat• 14 years ago

I've got the same opinion of the service as well. Not impressed or compelled to purchase anything for the last several months.

thibaut_barrere• 14 years ago

I bought plenty early on (Optimizely, Ginzametrics etc) but none since then.

I unsubscribed at some point even, because it had become really unrelevant to what I need.

swalberg• 14 years ago

No, I agree. I had signed up to get the Mixpanel lifetime account. The next few months had stuff that didn't interest me, but were helpful enough that I would occasionally send them off to friends. Then it became online courses and get-rich-quick-but-not-so-quick-that-its-scammy types of things. I unsubscribed a little while ago.

One of the guys that does courses for AppSumo has a blog (http://www.nevblog.com/) and he often talks about churning out these courses. He's even got a course about building a course.

ohashi• 14 years ago

Perhaps it's an inventory problem. You can cherry pick the best stuff when you're starting but the pool of remaining awesome products may grow smaller over time. If that were true, then the choice becomes less offers or start lowering the quality bar.

stevenkovar• 14 years ago

AppSumo's Brand Sumo here.

First, thank you Rob for taking the time to share your experience and about how you feel regarding AppSumo. Feedback like yours—and that of everyone else in this thread—is painful but also important, especially considering many of the comments start with something like, "I used to love AppSumo."

I agree that the quality has declined over the past year, so I wanted to take the time to respond to you and explain that we have spent a lot of time in the past two months gaining insight and clarity into our situation. We came to realize that our copy is overly sales-y and many of the products we feature lack the substance necessary to really help entrepreneurs drive their businesses forward. That's not to say AppSumo is failing; we're still a profitable business and we have many fanatic customers who can attribute their growth and success to the fundamentals they've learned and tools they've found on AppSumo.

We've become beyond obsessed with customer happiness, with taking pride in everything we do (down to how clean we keep our individual desks), and with keeping the fun and quirky attitude we've become known for. Transparency about customer happiness is important to me personally, because it holds us accountable to make every experience with AppSumo memorable—for this reason we publicly display our daily stats on customer happiness at http://appsumo.com/happy .

I think this article, which Tommy was kind enough to surprise us with, is evidence of our new vision and a good indicator of the pride we place in our behavior and obsession with our customer and partner happiness. We're grateful that many here on Hacker News have become part of our community, and I am personally interested in hearing your experiences with AppSumo and how you feel. Feel free to share your thoughts with me at steven@appsumo.com or @stevenkovar on Twitter.

autophil• 14 years ago

I see you've been reading Apple's Genius Bar manual.

djt• 14 years ago

Here are my thoughts.

I used to love app sumo. There was interesting new apps and productivity/work/business programs that I could buy at a discount that allowed me to use the full apps without restrictive freemium controls. It was an excellent way for businesses to get new clients to trial their software IMHO.

Over the past year or two all the emails I get are either the same courses or offers over and over again or seem to be targeted at the hacker equivalent of a Nigerian Scammer.

I don't think that the copy is too sales'y, I think that the products you have for sale are generally shite compared to what you used to have.

People being happy will keep us on the mailing list for a while but in my opinion you need to improve the quality of the products you're selling.

My intention of this is that you get 100% true feedback. I think the people that work at sumo are great and I hope you guys get back to the top again. If you're profitable now then if you can do this then I imagine it will help the bottom line :D

badclient• 14 years ago

Four paragraphs but not a single thing to really address the core, specific complaint about you carrying too many info products. Instead, you almost sound ignorant of the core complaint when you say that Tommy's blog post is an indicator of your new vision. The average customer here in this thread is not like Tommy; it's the guy looking to buy stuff from you. You do nothing to address their complaint.

Is your new vision only focused on people who create products? If not, what changes can we expect as buyers? Will you please address that? Thank you!

I think you guys have the right intention but honestly you are going overboard with being nice at the expense of delivering nice products.

rjsamson3• 14 years ago

Steven, thanks for responding - I'm glad to hear that you guys are open to listening to customer feedback. I may take you up on your offer and shoot you an email with some thoughts later this weekend. I think though, if I could point to one standout example of what's gone wrong with AppSumo in the past year its this: http://www.appsumo.com/course-about-building-a-course/

I'm horrified to see AppSumo selling a course on how to sell courses on AppSumo - to me this wreaks of the ebook marketing scams selling ebooks that teach you how to sell ebooks that teach people how to sell ebooks. I've always thought of you guys as a strong and respected brand, but that's pretty low.

Thanks!

callmeed• 14 years ago

Agreed. We need some sort of catchy term for daily deal fatigue.

brownie• 14 years ago

No I agree, and ended up un-subscribing from their e-mail list. I was sick of seeing the same bad offers popping up day after day.

Zaheer• 14 years ago

I really wish AppSumo would change their homepage. Apart from the tag line (and reading the article), I had no clear idea what AppSumo did.

hcarvalhoalves• 14 years ago

That's exactly the point, so you just click "Login with Facebook".

untog• 14 years ago

Right, but... I'm not going to do that unless I know what I'm clicking.

TillE• 14 years ago

That seems like the sort of practice which is fine for normal users, but terrible when your market is developers.

Facebook apps in particular have a bad history of sticking crap in your profile and spamming your friends. I don't mind logging in with Google OpenID because I know it just gives you my name and email address, and that's it.

jasonwilk• 14 years ago

Not surprised to see Noah being a customer service boss. He is a tireless entrepreneur and a great guy.

jusben1369• 14 years ago

The good news is if they're taking a split of the revenue with you then at least when they say "Let's lower the price!" they also have skin in the game.

50 - 70% may seem like a lot. If you really only think you'll do a one time sale and not repeat sales then it might be too high. However, I assume that if you have a good service or offering that you'll get future repeat sales? So it's a marketing expense to capture a customer and the more confident you feel around the "lifetime value" of a customer the more you might be ok with such a big up front or initial revenue share cost.

astrojams• 14 years ago

Excellent well crafted title for Hacker News. This is exactly the sort of content that does well here and hopefully will help you sell more passes to your courses.

salman89• 14 years ago

Considering a $50 discount and a guess of 70% for AppSumo, OP paid an effective $120 CPA. In return, did OP gain lifetime value from bought actions? Did he increase exposure for his book so that more people will buy at full price? Will he have repeat customers? Is this a positive ROI move? I think that is a better metric to measure this type of _marketing_, not "we sold x copies in y days!!".

I understand that there is no variable cost, but by offering a permanent "discount", OP may have permanently devalued his product. If that steep of a cut was viable, then author might have had a bad price point to begin with.

In general, the same thing must be considered for products with little to no variable costs. I'm not sure what the optimal solution is, but I would think that one would want to sell even at $0.01 - because a sale on a product with no variable cost has to be better than no sale at all...

patio11• 14 years ago

I would think that one would want to sell even at $0.01

You definitely don't want to do that. You're going to be overwhelmed with support requests (for an e-book, even!) from the least competent potential users imaginable. Moreover, you're going to blunt the reason for writing the book in the first place, because the people best positioned to get value from the book will not do so because it is too cheap to be taken seriously as business advice.

ovi256• 14 years ago

You are right for $0.01 cost, but I wonder if that changes for $0.01 profit. What if your COCA (cost of customer acquisition) eats all but $0.01 of the revenue ? You are bringing in positive marginal revenue, and you don't have the downside you mentioned. Of course, you have others, such as this cost structure means you're making someone else rich, not yourself, and it's a very fragile situation, you can't absorb COCA increases.

liquidcool• 14 years ago

Yeah, I came to write something similar. With a 34% discount, then a >50% commission he's selling for 1/3 of his usual price, and like Patrick says, this is further reduced by support costs from, well, cheap customers. It is like Groupon, but most Groupon successes make money from full priced add-ons, and I don't see that here.

A $100+ CPA is also a great way to think about it. I think you could get some decent affiliate traffic (which is what this is, really) for half that.

Side note: I visited App Sumo's site as a non member and there's nothing to tell me what the site is, or why I should sign up, other than it's a "store for entrepreneurs." Presumably they expect you to Google what it is, or perhaps more likely, arrive having already been explained elsewhere what it is and decided you want in. But it seems strange they wouldn't want more control over the message. I'm assuming this works for them, but I'm not sure why.

bluetshirt• 14 years ago

Gypsy ninjas? Gypsy is a highly offensive ethnic slur practically everywhere in the world except America.

cobrausn• 14 years ago

http://en.wikipedia.org/wiki/Gypsy_(term)#Gypsy

The word 'slur' is not mentioned once on that page. At best, its use as an offensive slur is context sensitive (at least according to http://en.wikipedia.org/wiki/List_of_ethnic_slurs).

mattmanser• 14 years ago

It does actually mention it's an insult a lot of the time half way down the page. You wouldn't use it as an ethnic slur like 'roast beef', people accuse others of being a gypsy or a pikey. It is 'considered to carry pejorative connotations' as wikipedia delightfully puts it.

slurgfest• 14 years ago

AppSumo seems like a pretty incestuous (or maybe better 'self-referential' or 'recursive') business, meaning: here is a startup which is totally oriented toward taking commission on sales of other people's startup services oriented to customers who want to make startups.

By that measure, Advocare is also 'crushing it.'

tbrooks2• 14 years ago

Is it possible that AppSumo just shifted their customer focus from the HN/startup type to more of a general entry-level audience?

If that's the case, then the products they sell might not be so scammy... maybe they actually help real people solve real problems.

willhsiung• 14 years ago

Interesting that I once purchase $50 of AppSumo credit for $25 and ended up using most of it to purchase a 3-year Hacker Monthly subscription as most of the stuff on sale didn't appeal to me!

thucydides• 14 years ago

I usually stay on topic while on HN, but I have to say that the phrase "crushing it" is extremely annoying, and I wish people would stop saying it.

lrobb• 14 years ago

Crushing it totally jumped the shark

npguy• 14 years ago

It is 2012, and i am surprised these "marketplaces" still exist in the same format, instead of a thoughts.username.com, books. username.com, tutorials.username.com etc, and a totally unique discovery algorithm powered by past analytics (a google scale algo version of stumbleupon).

Device lock-ins do not help either. just adds to the we have a marketplace hence users give us x percentage model.twitter, for example shd have been a protocol and not a private firm.

$21,243 in 8 Days: Why AppSumo is Going to Keep Crushing It

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