Valley vs Normal Founders

Noah Kagan and Sam Parr discuss the contrast between Silicon Valley entrepreneurs and "normal" entrepreneurs, highlighting different approaches to business valuation and success metrics.

• Silicon Valley Entrepreneur Mindset:

  • Focus heavily on company valuations
  • Think in terms of multiples
  • More concerned with potential value than current profits

• "Normal" Entrepreneur Mindset (Noah & Sam's Approach):

  • Focus on concrete metrics:
    • Actual revenue
    • Real profits
  • More practical approach to valuation
  • Care about current performance over potential value

• Real Business Examples:

  • AppSumo's Valuation:
    • Currently worth between $250M-$1B according to Noah
    • Generates around $80M in annual revenue
  • Valuation Methods:
    • Noah suggests roughly 5x revenue/profits as a reasonable multiple
    • Prefers focusing on actual business performance over theoretical valuations

• Personal Philosophy:

  • Noah doesn't view theoretical company value as part of his net worth
  • Focuses on tangible metrics and actual business performance
  • Believes in building sustainable, profitable businesses rather than focusing on exit valuations

• Business Approach:

  • Started as a side hustle with modest goals ($3,000/month)
  • Never focused on making millions or maximizing valuation
  • Emphasis on building something sustainable and profitable