Ten years ago, I was on one of my usual runs, listening to the Tim Ferriss podcast. Tim was interviewing a super interesting taco-lover named Noah Kagan.

I found his story inspiring, so I saved the episode in case I decided to take business seriously (SPOILER: It didn’t happen.)

Noah has helped many founders grow quickly by promoting lifetime deals through his platform, AppSumo, a marketplace for software deals. The process is straightforward: submit your product for review, and if approved, it can go live within a week. In return, you’ll get exposure, customer feedback, and stress-testing for your product.

But AppSumo has received criticism from plenty of founders. The main complaint? Their steep commissions, asking for up to 40% of revenue fees.

Founders have also complained about the quality of their customers:

Some have even accused them of ending campaigns without explanation:

So why bother at all?

Even with these disadvantages, it keeps proving effective for many founders:

Not only can it generate up to hundreds of thousands of dollars for the most successful campaigns.

Below are 3 successful AppSumo launches you can learn from if you want to take the leap and risk it.

Heyzine

Albert Balada, a freelance developer, decided to list his PDF flipbook maker side project, Heyzine, on AppSumo. He had no expectations at all. But to his surprise, he earned $60k in net revenue after 15 months of running his LTD on AppSumo’s Marketplace.

One of the first benefits he noticed was that he didn’t need to drive traffic to his deal page. “I sent zero traffic to the deal’s page, nothing, nada. And yet it worked well from the first week,” he shares. AppSumo’s large user base and occasional ads on Instagram and Facebook were enough to generate sales.

However, Albert noticed many AppSumo customers buy products speculatively: “You get many customers who barely use the service. They buy, thinking it might be helpful for them in the future but end up not needing or forgetting about the service.”

This translated into a high refund rate of 16%. So Albert started asking about every refund and discovered “most of them just didn’t need the service or expected a totally different thing.”

While AppSumo was just one factor in his success, it provided a crucial boost that allowed Albert to transition from freelancing to full-time SaaS entrepreneurship.

Key metrics from HeyZine’s AppSumo campaign:

• Revenue: $80k over 15 months ($60k after AppSumo’s cut)
• Refund rate: 16%
• 1% of customers accounted for more than 50% of total LTD costs

HeyReach

HeyReach, a LinkedIn outreach tool, launched on AppSumo’s SumoDay 2023 event. In just four days, the campaign got them nearly $200k in sales, with over 1k licenses sold and a 9% conversion rate.

The best thing? They had a lot of fun in the process and gained true fans. “During this whole AppSumo launch, I met a ton of nice people and made a bunch of friends and supporters!” shared Nikola.

The founder Nikola Vukovic attributed their success to these factors:

1. Thorough Preparation: The team spent weeks preparing for the launch, implementing new features and creating compelling marketing materials.
2. Customer Support: They established a structured support system to handle inquiries promptly, aiming for response times under 10 minutes during work hours.
3. Community Engagement: They actively participated in AppSumo’s community, joining 30+ Facebook groups, conducting giveaways, and hosting webinars.

Nikola advises taking the campaign not just as a way to earn more money, but as a way to validate their product and positioning and get a sign of early product-market fit.

Nikola concludes with advice for other founders: “Be responsive, be customer-oriented, but also be bold and stay on your ground and vision. AppSumo can be a make-or-break for your company, so make sure you do your best and treat it seriously.”

Key metrics from HeyReach’s AppSumo campaign:

• Total sales: $190k
• Licenses sold: 1,117
• Refunds: 34 licenses (3%)
• Conversion rate: 9%
• Reviews: 33 5/5 ratings

Frase

Frase, an AI-powered SEO tool, launched on AppSumo and became the largest 30-day launch in AppSumo’s history. In less than 1 month, Frase generated nearly $800k in total revenue and added over 8,000 customers to their base.

The launch saw an immediate impact: “Within minutes of the launch going live, our site traffic increased about 1800% above normal levels”. Frase employed several tactics to maintain momentum, including featured deals, webinars, and strategic emails. A month after the campaign, Frase saw a sustained increase in weekly active users: from 300 people to over 5,500 people using Frase every week.

When users requested access to their premium product, the Answer Engine, Frase quickly adapted: “We could have easily just blown off these users and just forged ahead with the existing deal. Instead, we moved quickly, and after a few dozen frantic internal Slack messages, we opened up the product to Sumo-lings”. This decision led to a significant boost in sales.

The campaign’s impact extended beyond the immediate sales. Frase leveraged this engaged user base to gather 300 reviews and the creation of a highly engaged Facebook community, which today has more than 10k members.

Frase’s AppSumo campaign was a resounding success, not just in terms of sales but also in building a engaged user community and gathering valuable feedback. As they noted, “The most valuable thing for Frase–by far–is what we’re learning from these highly engaged and vocal users on a daily basis”.

Frase’s AppSumo launch key metrics and results:

• Revenue: $792k in 28 days
• Users: Grew from 840 to 13,579 monthly active users
• Reviews: 312 public reviews on platforms like Capterra, G2, and Trustpilot
• Website traffic: 500% increase in sustained website traffic (measured two months post-launch)

Pros and Cons of launching on AppSumo

Pros:

• Quick revenue generation: Many products experienced significant revenue boosts in a short time. For example, Frase generated nearly $800,000 in total revenue during their 28-day campaign.
• Massive user acquisition: AppSumo campaigns can lead to a substantial increase in the customer base. Frase added over 8,000 customers during their campaign.
• Increased brand awareness: Being featured on AppSumo exposes products to a large audience of potential customers and early adopters.
• Valuable user feedback: The influx of new users provides an opportunity to gather extensive feedback for product improvement.

Cons:

• Financial pressure: AppSumo pays out 60 days after the end of the month. Also, AppSumo takes a significant percentage of the sales, between 30-80%, which can impact overall profitability. Although you can negotiate like the HeyReach team did: they secured a 50-50 revenue split instead of the typical 70-30 with AppSumo.
• Support pressure: The sudden influx of users can strain support resources, especially for smaller teams. HeyReach’s team worked long hours (from 9 am to 4 am+) to provide customer support.
• Potential cannibalization and product devaluation: Existing customers might feel frustrated if they paid more for the same product before the AppSumo deal. Offering deep discounts on AppSumo might make regular pricing seem expensive in comparison.
• Upselling is almost impossible: Lifetime deals may limit future revenue from these customers. In Baseline’s founder’s experience, AppSumo customers “are very unlikely to switch to a monthly plan later on”.

Is this for everyone? Not at all. If you have a SaaS product that’s already generating revenue elsewhere, it can make sense. You should be cautious and follow what the creator of Heyzine recommends: “You need to avoid dependence on AppSumo, so you either have another good revenue channel or are prepared to close the deal anytime, knowing you can support the future costs of lifetime customers.”

If you think you can survive without this platform, and you have the resources to support this campaign, then by all means go for it. And send me a message so I can help you expand your reach!