Staffing

‘People Development’ Drives AppSumo to $80 Million in Revenue

I last interviewed Ayman Al-Abdullah for this podcast in 2018. He was the CEO of AppSumo, the daily deals site for digital goods, having joined in 2015 after launching and selling two businesses himself. He resigned as CEO in late 2021.

During his tenure, AppSumo’s annual revenue grew from $3 million to a whopping $80 million. He attributes the growth to “people development” — hiring the right team and delegating the work.

My entire audio conversation with Al-Abdullah is embedded below. The transcript is edited for clarity and length.

Eric Bandholz: It’s been four years since you’ve been on the show.

Ayman Al-Abdullah: Right. We discussed the rise of AppSumo. Last year I stepped down as the CEO.

Bandholz: AppSumo blew up during that period.

Al-Abdullah: We were doing about $3 million in revenue when I took over. When I stepped down, we were doing $80 million and growing 80% per year. We’re knocking on nine-figure-revenue territory now.

It was an amazing ride. It was fun working with Noah Kagan, who founded the company, and the entire team. However, a business with dramatic growth requires a different type of CEO. That’s why I stepped down. We needed someone to take us to the next level.

Bandholz: You have great insights about hiring.

Al-Abdullah: Let’s walk through the levels of growth in a business. Getting to $3 million is an incredible, arduous journey. It’s three pillars to get to that point. First, who is your ideal client, the person you’re solving the problem for?

Second, what is the product? What will you deliver to those clients?

Third, how will you communicate the product to the target audience? It’s critical to know who you’re reaching. Otherwise, you release a product without knowing who it helps. It’s the equivalent of addressing a love letter to “Whom it may concern.”

So those three things — person, product, promotion — can get you to mid-seven figures, depending on the type of business.

So once you get to about $5 million in annual revenue, everything changes, and many businesses reach a bottleneck. They’re stalling due to a people problem. Before about $5 million, you’re in product development mode. Afterward, you’re in people development. The goal for that type of CEO is to rise above the day-to-day crises.

Heres’ an example. Shortly after starting at AppSumo in 2015, I went on a vacation to Columbia. I was looking forward to having two weeks away. But I spent the entire vacation in the hotel lobby putting out fires and answering customer support tickets.

There had to be a better way. I asked myself, “What is taking up my time?” It was a combination of customer service, admin work, and launching new deals.

So I started building a team that would address each of those elements. We hired Chris Schelzi to handle the backend of AppSumo. We hired Olman Quesada to close deals. Slowly, over time, I extracted myself from the day-to-day details.

Sure enough, I was in Europe a few years later and entirely offline. The business was thriving. There were no fire drills.

The personnel change enabled me to work on projects two to three quarters, if not years, in advance.

Bandholz: Smaller brands cannot afford expensive employees. It’s a cash-flow problem. An entrepreneur can’t hire a person in the U.S. for less than $50,000. If a company is doing $1 million in revenue, that’s a big chunk of profit.

Al-Abdullah: Almost all of it, perhaps.

Bandholz: How does the entrepreneur know when to make that hire?

Al-Abdullah: That’s a great call out. Here’s what I did at AppSumo.

When I joined the company, the entire team was focused on SumoMe, an email capture tool. I would close a deal on Monday, write the copy on Tuesday, send an email on Wednesday, support customers on Thursday, and reach out to prospects on Friday. I did that every week. I didn’t enjoy it, and it wasn’t my strength. Plus it didn’t produce much money for the business.

So I looked at my contacts. I hired an intern from the honors business group at the University of Texas here in Austin. He ended up working for AppSumo for six months. I paid him $15 an hour out of pocket through Venmo for about 10 hours a week.

That’s $150 weekly. Any business can afford that. The intern freed an entire day for me each week. I then was able to close more deals. Suddenly the business started growing by 20% to 30%. That extra revenue allowed me to make my first full-time hire.

It all started with the part-time intern. There are a ton of places to find that type of employee. Look overseas. Hire a mom seeking to get back into the workforce. Hire a student. Consider a virtual assistant. They’ll all do incredible work.

Bandholz: One lesson from that is knowing how to use the extra time productively.

Al-Abdullah: Exactly. It’s an essential skill to learn, especially if you’re a bootstrap business. AppSumo is 100% bootstrapped. It’s critical to use the time wisely.

We recognized, for example, that if we doubled our effort towards sales and closed better deals, we would grow the business. And that’s what happened. It’s like understanding your strategic flywheel. If you know your business’s flywheel, you can’t help but bring in more customers.

Bandholz: You were a great salesperson. How did you know when to hand it off?

Al-Abdullah: An entrepreneur or CEO should slowly back away from the business, where you are no longer involved in the operations and production. Otherwise, you’re not going to have the time to focus on growth.

For me, that was a multi-year process. We hired Olman for sales and eventually built an incredible sales team. In the interim, I closed around three deals a week, then two deals, and then one.

Bandholz: Let’s discuss compensation. You and I are here in Austin. We compete for local employees with Facebook, Google, the big players. How do you make AppSumo competitive with those companies?

Al-Abdullah: We never will if it’s salary alone. But we can compete on the intangibles.

For example, we believe in helping the underdogs and the next generation of entrepreneurs. Almost all employees at the company run a side hustle. They believe in entrepreneurship.

We support our team’s side efforts. We’ll do side hustle Saturdays and help them work and build their businesses.

Bandholz: You’re no longer AppSumo’s CEO. What now?

Al-Abdullah: I planned to step back and enjoy myself. But I had many people reach out to me about joining their company as CEO. I wasn’t ready for that, but I am interested in coaching and helping others. I could have benefited from it when I was starting in the trenches.

So I’m now doing advisory work for a handful of companies. I’ve found the work very rewarding. It’s an opportunity to stay close to business while not being in the driver’s seat, which is more than a full-time job, as you well know.

Bandholz: Speaking of a full-time job, what are your thoughts on a CEO’s working hours? Society is changing, it seems, and no longer expects that person to work nonstop.

Al-Abdullah: It depends on where you are as a CEO. Do you have an established leadership team to handle every fire drill?

Until you have the team and processes in place, you should expect the job to be hard. It is not easy.

Bandholz: How can people reach out?

Al-Abdullah: Twitter is the easiest — @aymanalabdul. My website is AymanAlAbdullah.com. I have a link on my home page to a free Notion template to help manage and organize a team. Anyone can use it.

Eric Bandholz

Eric Bandholz

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