How WordPress Became AppSumo's Secret Weapon for Growth

Noah Kagan, the founder of AppSumo, is a master of leveraging overlooked opportunities in the software world.

He found distribution in a place where no one was looking using his out-of-the-box thinking skills.

1. WordPress Plugins: A Strategic Goldmine

A. Identifying Hidden Value in Plugins

Noah recognized that many WordPress plugins were ripe for monetization, waiting for smart entrepreneurs to unlock their potential.

His strategy was simple yet brilliant:

• Scan the WordPress directory for popular plugins

• Target plugins with high install counts but were poorly maintained by inactive developers

• Acquire these assets at bargain prices

Noah purchased a Google Analytics plugin with 1 million active installs for just $100,000. This move demonstrated his keen eye for value arbitrage.

B. AppSumo Cross-Promotion

After acquiring these plugins, Noah rebranded them and cross-promoted AppSumo within the WordPress ecosystem.

He bought plugins like WP Fonts and All-in-One Favicon, which he used to drive traffic to Sumo.com (an email capture tool).

Sumo is one of the most popular apps owned by Appsumo. Think of it like Netflix Originals for Software.

Noah strategically embedded links and promotions within these plugins, driving traffic and increasing conversions for Sumo.

2. Chrome Extensions: Lessons in Experimentation

A. The Appeal of Chrome Extensions

Noah experimented with Chrome extensions as another potential growth avenue.

He bought a Chrome extension with 40,000 active installs for $25,000, aiming to monetize through premium features and ads.

B. The Challenge of Monetization

Despite the initial promise, the extension failed to generate significant revenue.

The reason was low CPMs for ads and difficulty in scaling active users.

Not every acquisition channel will work.

WordPress worked but Chrome Extensions didn't even though both seem very similar from a birds-eye view, their usage varies significantly.

You can have 50+ Chrome Extensions sitting in your Chrome Browser while never using more than a few.

With WordPress, every extra plugin slows down the site so the usage is pretty critical otherwise sites using WordPress remove them.

Noah Kagan's Playbook for Digital Asset Acquisition

Value Arbitrage Principles

Noah’s approach is rooted in finding and acquiring undervalued digital assets at a bargain. He looks for assets that others undervalue.

He recommends looking for platforms that have opportunities where creators are not monetizing their work like WordPress.

So you can use the acquired assets as a channel for promoting your core business.

Building a Growth Ecosystem

Successful entrepreneurs view acquisitions as more than standalone products.

They create interconnected assets that drive traffic, generate multiple revenue streams, and amplify overall business reach.

Noah emphasizes entering markets where competition is low and valuations are reasonable.

For example, he observed that Shopify apps, unlike WordPress plugins, had higher valuations because their developers understood the recurring revenue model.

So it would be much harder to find Shopify apps at a bargain price than Wordpress plugins. Shopify app developers often demand 10x their annual revenue for acquisitions.

The digital marketplace is full of hidden gems. Your next big opportunity might be just one smart acquisition away.

Noah recommends looking for problems others haven't identified. That's how you win in business.

Top Tweets of the day

1/

Terrific framework if you want to break into any industry from zero. I recommend complementing it with this to dig into their details to make them feel comfortable and like you within an hour.

The CRM part is crucial - your network becomes an asset only if you can track and leverage it systematically.

2/

This matches real-world business patterns perfectly. The 90/10 split exists in every field.

Most people seek stability, not growth. This isn't bad - it creates opportunities for ambitious people to stand out.

Smart businesses need both types: reliable workers for stability and entrepreneurs for innovation.

3/

Pretty accurate observation about AI Hype. If you are a 1x developer, you can become a 10x developer with AI.

AI coding tools are force multipliers, not magic wands. They help experienced developers become 10x engineers but won't turn complete beginners into senior engineers overnight. The real value is in speeding up learning and reducing repetitive tasks.

It is still a steep climb up for humans but you can learn how to learn with AI so you can learn basic programming principles quickly.

Plenty of people who have never coded are making full-stack SaaS in <6 months. This took gruesome effort before AI. It was nigh impossible. Now pretty achievable for someone willing to be consistent.

Rabbit Holes

1. How Chilled Tools used Bolt to build a CRM system in one week by Stackblitz

2. Leaked System prompts from v0 - Vercel's AI component generator by /r/LocalLLaMA

3. How He Gets $1,000,000 ARR With Only 450 YouTube Subscribers by Edward Sturm

What’d ya think of today’s masterpiece? Hit ‘reply’ and let me know—don’t hold back, I can take it (probably). 😜

First time here? Join the cool kids’ club.

Also, I’m on X because the smartest entrepreneur in the world owns it.

More Startup Spells 🪄

1. The Mario Marketing Framework (LINK)

2. 9 funniest ads of all time (LINK)

3. How To Build Viral Clones (LINK)