A different kind of business philosophy with Rand Fishkin
On this episode of our productivity podcast, Get More Done, we learn how Rand built a successful startup with three people, a barely-there advertising budget, and no strict deadlines.
The YouCanBookMe team
After stepping down from Moz, his first startup, Rand decided professional success wasn’t the most important thing in life.
So he started his next business, SparkToro, with a completely different approach.
By aligning his company incentives, strategically saying no to business offers, and making his product simple to use, Rand adopted a chill mentality and finally has time to live his life.
Tune in (or read below) to hear why startups should stop trying to become unicorns, why being a good fit is key for both an employee and a customer, and why slow and steady is the best way to build a business.
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Listen to episode 21
In the episode “A different kind of business philosophy,” we discuss
- How Rand’s approach to life and work changed since he wrote his book, Lost and Founder, and stepped down from Moz
- How making your product very simple to use makes it very simple to support
- Why the team at SparkToro says no to a lot of business requests
- How SparkToro gets things done: no strict deadlines and using outside contractors
- Why it’s critical to align incentives inside your company
- Why Rand had to realize firing someone isn’t the end all be all
- How Rand adopted the chill methodology he uses at SparkToro
- Why Rand is done believing that professional achievement is the only thing that matters in life
- How SparkToro managed success with a barely-there ad budget and little focus on SEO
- Why SparkToro doesn’t want everyone as their customer, they want the right type of customers
- Why being a good fit and recognizing other good fits is the most important aspect of what makes a good leader
- What’s next for Rand: working on his video game project and spreading the slow and steady growth philosophy behind SparkToro
“A lot of the folks who reach out say, ‘Hey, we want to do this partnership?’ or ‘Do you have an affiliate program?’ or ‘Could we do some co-marketing together?’ We say no to most of them. We just say no. And I wouldn't call that necessarily falling through the cracks, but I do think it's an intentional design of focusing on a small number of the things that we think are most important for the business so that we can minimize essentially the time investment required and maximize the quality of work that we do in the limited time that we give the business.” - Rand Fishkin
“If someday I'm not a good fit for SparkToro anymore or Casey isn't or Amanda isn't, it's just that. "Hey, Rand, it's been a good run. You got to go." So what? You can get another job. We're in, what, a three and a half percent unemployment economy in the United States? And in tech, it's negative 50%. The demand is outpacing supply so much. I just don't see any reason to work at a place that doesn't match with what you need and to have people at your place of work that don't match what you need. Just move on.” - Rand Fishkin
“I have always felt like I could be doing more. I could be better. I know if I just applied myself and made some smarter decisions and really put my notes to the grindstone, I'm like, ‘I could crank it out. I could get to high achievement status.’ The older and more mature and wiser I get, the more I'm like, pardon my language, ‘Fuck that whole thing.’ Just no. I want to be done with that side of me that believes that high achievement professionally is the only thing in life that matters.” - Rand Fishkin
“SparkToro hasn't spent anything on advertising basically. We've done no programmatic ads of any kind and just a few sponsorships of things here or there, and very frankly, I like that model. What we do is essentially the same thing our product helps other people do, which is go find the sources of influence that our audience pays attention to and then be present in those places. People listen to the Get More Done podcast in the marketing universe, ‘Hey, Rand, you should go on Ben's podcast and chat about SparkToro a little bit,’ it's that kind of thing. Podcasts, YouTube channels, blogs, email newsletters, a lot of Twitter and LinkedIn, which is where a ton of marketing conversation is concentrated, that's essentially our marketing flywheel.” - Rand Fishkin
“When you build a business in a way where you essentially say, ‘We don't need to maximize for growth at all costs,’ we can build this business in the way that we want. We can do a lot of things like, ‘Hey, even if SparkToro might be a right fit for you, but our style of marketing, our style of communication, which is very informal. Very like we're friends. There's a little bit of humor always. If that doesn't resonate with you, because it's not professional enough or it doesn't feel like a right fit, too bad. Go away. Go find some other company to work with.’ That's fine. We don't care, we don't need to have everyone as a customer. We want the right fit types of customers.” - Rand Fishkin
“The way that 99% of tech startups at least try to go, which is how do I raise money? And how do I get investors on board? And how do I scale to become a unicorn? I think that should be the goal for less than 1% of tech companies, and I think right now it's the goal for 95% of them. That is a system I would really like to change. A system of thought in the minds of entrepreneurs and would-be entrepreneurs all over the planet. I want people to know that there is another way that you can build a small, profitable, sustainable, long-term focus, where the goal is, how can we design a business that fits best with our lives and survives for a very long time profitably? Doesn't have to kick off a ton of money every year, it just has to make enough to make you and your employees and team happy, satisfy your customers, and keep going.” - Rand Fishkin
Meet today’s guest, Rand Fishkin
Rand Fishkin is cofounder and CEO of audience research software startup, SparkToro. He’s dedicated his professional life to helping people do better marketing through his writing, videos, speaking, and his book, Lost and Founder.
When Rand’s not working, he’s usually cooking a fancy meal for the love of his life, author Geraldine DeRuiter. If you bribe him with great pasta or fancy cocktails, he’ll happily pull back the curtain on big tech’s dark secrets.
Productivity resources to explore
- Lost and Founder: A Painfully Honest Field Guide to the Startup World by Rand Fishkin
- 5four Digital
- Black Illustrations
- Rand’s Twitter
- Rand’s LinkedIn
- SparkToro blog
- Get More Done podcast
“A Different Kind of Business Philosophy” full transcript
This transcript has been slightly edited for clarity and readability.
From YouCanBook.me, this is Get More Done. The podcast to help you and your team become more productive. I'm Ben Dlugiewicz, and my mission is to help you stomp out inefficiencies, so you can focus on work that will grow your business. Have you ever been scared to move on from a job or a business idea, because of the fear of not being able to repeat your success? In this episode, we are joined by Rand Fishkin, the founder of Moz and current CEO of SparkToro.
Rand explains the tough decisions he made to move on from a company he founded, making over $40 million a year, to start a company with a team of three. Rand reveals the processes his small team uses to handle everything and how they are doing more with less. The easiest one: you can start today. Rand also speaks on what makes a good leader. All of that and more with Rand Fishkin on Get More Done, starting now.
Excellent. Welcome back to the Get More Done podcast, where we talk about all things productivity, getting things done, and leveling up. On today's episode, I'm sitting down with the legendary Rand Fishkin, the CEO and founder of SparkToro, the former CEO and founder of Moz, and the author of Lost and Founder, which is an amazing book. Rand, welcome to the podcast.
Yeah. Thanks so much for having me, Ben. Great to be here.
Excellent. I'm excited to dig into everything that you're building now with SparkToro, everything you've learned from the book, and everything there, but when we've started these conversations, we start with an icebreaker question. This one's for you: since you are in the Seattle area, everything's super eclectic. I wanted to know, what's the most unusual thing in your house right now?
This is case specific to us. My wife and I do not have kids, but we have two bins filled with toys that we have collected over the years, for kids who visit us. Let me urge anyone who doesn't have kids to do the same because I cannot tell you how awesome it is for both parents and children when they come over to the childless couple's house and there are toy bins. That is just an awesome experience for everyone and helps to keep kids entertained and I don't know, makes them think like, "Oh, I want to come back and play with your toys again." So highly recommended.
Yeah. That's some pro-level stuff. Having the arsenal of toys to be the great uncle Rand. Everyone wants to come to uncle Rand's house.
Exactly. Exactly. You've got to design your systems so that you encourage friendships with people who have kids that are like, "Eh, I don't know. That weird childless couple down the street, do we really want to go over there?"
Yes, exactly. That's really, really awesome. Briefly touched on your book, Lost and Founder. I've read this book in a week. I've never read a book that fast. I just couldn't put it down, and it basically goes through your experience with building up Moz from just you and your mom to this multimillion-dollar organization. All those pop culture references really spoke to me too, like the Globex Corporation from Simpsons, all that good stuff got me right in the feels for my past. But I'm curious, since this was such a vulnerable take, how has your life changed since you've told this story?
It's changed a dramatic amount. When I wrote Lost and Founder, I was still at Moz. I had stepped down from the CEO role, I was still chairman of the board of directors and an individual contributor inside the company, but that was not a great experience. I think those last four years at Moz were very, very difficult. Over time, the longer it had been since I was CEO, the more I disagreed with what leadership was doing and decisions that the board was making or not making. You read about some of them in the book, but I think there was almost like this mental cage around me and it was a combination of fear and self-doubt. Basically, fear that I couldn't do it again, that if I left Moz, maybe Moz was my one good idea, and who knew if I could ever replicate that success to any level.
Moz itself was stuck in the, basically this uncanny valley of not quite a venture startup success and not enough to be a failure. It was plotting along at like 50 million a year in revenue, but not growing fast. It was growing maybe 3% or 4%, I think that last year, which is just not interest at all. It's very profitable, which is great if it's a private business that individuals own or something like that, but it's not. It's a venture-backed startup, so it has to show fast growth. How's it going to be a unicorn? Will the growth rate ever turn around? And of course, I thought that the path it was taking was not the right one.
I think you can almost feel it inside Lost and Founder, there's this fear and uncertainty and the sense that, even when I reread it, I'm like, "Oh, this author is really scared." And I was. I was really scared, really scared to leave, but eventually in 2018, just before the book was published, I did leave. The book came out. It had a very nice reception, which was awesome, and two reactions. So from the world of venture-backed startups and people who are very into that world, so a lot of entrepreneurs that I knew, especially more casually, there was this, "What the hell are you doing? You have turned your back on this asset class and world, and universe of people who thought you were really something, and now you're throwing us under the bus, and you'll never get funded again."
And then another universe of folks like yourself, Ben, who basically read it and said, "Wow, this is a really vulnerable, interesting, and authentic take, and we don't see a lot of those from the venture-backed universe." Mostly because of the reaction that the other folks had, because your incentives are, "Hey, keep playing along. You got to play politics here. Don't toss your investors under the bus, don't make enemies." My life is so much better, so much better in every way. New company, SparkToro, is designed and I'm sure we'll talk about this a lot, but designed to be a very chill work environment. We try to do everything at SparkToro in under 30 hours a week of work, so that we can do other things with our lives.
There are only three of us. It's just myself, Casey, and Amanda. We have a business that despite optimizing for this chill work thing, is actually growing at a rate faster than Moz's first 18 months. I think that's going to slow down. I don't think SparkToro will ever get to the $30, $40, $50 million level. Maybe it will, who knows, but I'm just so much happier in my life and being able to be... I think it's a frustrating, hard thing to say, but being CEO again is nice. Being able to make the calls, and I try to compromise as much as possible and never overrule my co-founder Casey who is very opinionated and has things that he likes doing, but so far just awesome.
As you mentioned in the book, you can definitely sense that things were coming in on you and you were getting a little bit overwhelmed and just wanting to break free of that, so it's really awesome that you're able to do that with the greener pastures in SparkToro. And three people, walk me through that because you've said that the key to that is very intentional design of business structures and processes and working with people who are self-motivated and competent. But specifically about those processes, you're a successful company with three people, there has to be something falling through the cracks. There has to be something that you're worried about.
Yeah, yeah. I'm not sure I'd call it falling through the cracks, but there are a lot of things that we just refuse to do. I'll give you an example. SparkToro is software. It's audience research software, so mostly marketing agencies and consultants, PR folks, those kinds of people use it, some startups, and whatever product people. But all the folks who use it basically go to the website, try out their free searches, and then they sign up. It's a relatively small number who sign up and a relatively large number who try it out, get a free account, and run free searches.
We have a lot of people who reach out and say, "Hey, could I get a demo?" or someone will jump on a sales call with me, and in the early days, I did those. I took those calls. And about six months into, after our launch, I told Casey, I'm like, "I'm done. I'm not doing them anymore. If people request it, I'm just filming one video. I'm going to send them to that video." And that works. It's great. Most of the people who asked for a demo, whatever, for better or worse did not end up signing up. I think it turned out to be the case that if you needed a demo, it meant you didn't really get what the product was for, and it didn't click with you immediately. And if it didn't click with you immediately, even once it did click, and I walked you through, it was like 1 in 20 people I gave a demo to actually signed up. So, forget it. Go watch the video. See if the video makes sense.
Now, Amanda and I just reply to all these people who write in, and just say, "Sorry, we're a tiny team of three. We don't do demos. Here are some resources for you." We do that with a lot of stuff. A lot of the folks who reach out say, "Hey, we want to do this partnership?” or “Do you have an affiliate program?” or “Could we do some co-marketing together?" We say no to most of them. We just say no. And I wouldn't call that necessarily falling through the cracks, but I do think it's an intentional design of focusing on a small number of the things that we think are most important for the business so that we can minimize essentially the time investment required and maximize the quality of work that we do in the limited time that we give the business.
Absolutely. With that, three folks are handling support and doing development, all of that contained within your job roles and that's all you three.
Yeah. One of the other things is, when I talk about designing a business to be able to support this type of life and structure, we built a piece of software that is very self-explanatory. SparkToro has, gosh, I want to say maybe 75,000 or 80,000 people who've signed up for free accounts and use them, where we have maybe 1,300 or so paying subscribers. That's a lot of people using the product every week and yet the support requests are, maybe we get about an average of seven or eight a day. The vast majority of those can be answered in a very quick email. I would say maybe one per day takes an actual 10 or 15-minute investment. The rest are super simple. One of the reasons that's true is because, after we built the product and launched it, Casey, my co-founder, set aside a ton of his engineering and development time just to build things that would make support easier inside the product.
People write in, they say, "Hey, I don't quite get this." We get two or three of those, okay, Casey's going to fix this so that nobody else has that problem ever again. We try to keep the interface and the tooltips. And the amount of data that's presented is not that big. The core of the product is essentially, you do a search, you get back rows and columns of data. There's not that many columns. That's it. It's easy to export, the buttons are all findable. You can check things off. We make it clear when you've added something to a list already. It's just very intuitive and familiar. It works like a lot of other internet marketing software and that pattern matching design makes it very simple to use, which makes it very simple to support.
That's the secret sauce right there, of just getting that customer feedback, getting that back into the product. I've been a proponent of that too, if two people are reaching out about the same thing, something's broken, we need to fix it. We need to dig into that.
I always tell Casey, I'm like, "If one person writes in, 10 people had that problem." One paying customer writes in, which means 10 of our paying customers probably had that problem. If two do, I think it's probably 30. I think it rises, it goes up.
Yes, exactly. That's great growth so far with SparkToro, and as long as you keep that up, it's only going to be up from there and keep your overhead low. Apart from just strategically saying no to a lot of things, what other processes do you have internally that are helping you save time?
Very meeting-light culture. We have a meeting between the three of us probably once a month on average, and that might sound crazy like, "How do you know what each other are doing?" We don't. I don't know what Casey's up to this week. I don't know what Amanda's really up to this week. I know that Casey is probably doing some stuff around this new feature maybe. Or maybe he's done with that, and he's focusing on some other small fixes. I don't know. Maybe he's taking the week off. Maybe he needs a chill week and he's doing it lighter and just answering some support requests and taking care of his kids. Great, fantastic. I don't concern myself with how people are spending their time and I just worry about the business results.
Essentially, we have a few projects that we're investing in at any given time. We try to get those done in a reasonably timely manner, but we don't really have deadlines around most of it and we use, I think the other secret sauce is, we use contractors and agencies for all sorts of things. We have someone who does finances for us. We have another group that does taxes for us, which of course is happening right now. We have a design group that we worked with on web design and UI and visual asset stuff, 5four Digital, they're just wrapping up a project with them. We used a UX designer at the very start, that I'd worked with previously at Moz to help with all of that stuff. We buy some of our data from various data providers so that Casey doesn't have to go crawl every single network.
It's a lot of systems and structures like that. And we built it on infrastructure using AWS and a variety of other tools like Stripe. It's expensive, but it makes payment structures really easy. WordPress is a little bit of a pain to keep secure, but it makes content really simple. That's how we do it. We use things that we're familiar with. We use structures that make it easy for us. We use contractors and agencies and this allows us to have other things in our life.
Amanda's running a marketing training program separately and that's going great. And she has her own personal brand, a newsletter that she's building up. Casey's got, he just moved into a new house and they were on vacation in Disney World for a week. He's the primary caretaker because his wife has an outside-the-home job in school administration that she's doing. I do a lot of... Well, not until recently because of COVID, but planning to do a lot more travel again. I'm the Creative Director for a video game. We all have different things in our lives, in addition to SparkToro, and yet we can make it because of these structures.
That's amazing, that you're only meeting altogether, maybe once a month and everybody just knows what they need to do and their heads down doing it and doing that deep work. It definitely sounds super chill because you're like, "I don't know what they're doing. They're hopefully doing the thing that they need to do." This is a huge juxtaposition from your time at Moz, over there it was like needing reports and KPIs and all this stuff. Is that why you broke away and built this SparkToro, this new culture of just, everybody's just doing the things that they need to do?
Yeah. I think two things are a big part of that. One is that previous experience of Moz and just feeling like, I don't love people management. I love working with people, like you and I get together and we do a great podcast together and hopefully, lots of people enjoy it. I love that teamwork attitude. But the incentives are aligned and the goal is familiar. You know that you want to create a great podcast for your audience. You've got whatever equipment and your recording system and your publication system and all that stuff aligned, and I know that I want to deliver a great podcast for your audience. You don't need to micromanage me like, "Hey Rand, have you done enough prep around this?" No, it's easy. The incentives are there and so the delivery system just works, it functions.
The same thing is true inside SparkToro. Casey, Amanda, and I all have the same incentives. Amanda's technically an employee and Casey and I are founders, and when we hired her, we basically worked with her and said, "Hey, let's put together essentially a bonus structure, where the same goals that result in our investors getting paid back and us doing well, result in you making lots more money." Great. We all know the thing that we have to do, we're all working toward the same goal for the same reason. It's a beautiful thing. You start to add lots of people into that mix. You start to add things like stock options, which even if a company does really well, they don't necessarily turn into money depending on how things will work and stock options are mostly a tax dodge and a bonus for the investors, so that they can do the long term capital gains play.
The whole venture asset class is just a giant tax dodge that the industry convinced the government to pass in, what was that? The late sixties, early seventies. It gets very weird incentives inside a traditional startup with that structure. I think if you can keep it simple and straightforward, and then you can hire people who are experienced and know what they're doing, and want to contribute in the same ways. And the other thing I think, I'm very thankful I haven't had to do this yet, but Ben, I was so, so scared, so hesitant to fire anyone at Moz. And I built a culture of that fear into the leadership and management design of that company where, essentially, it was like, "Oh man, letting someone go is just the worst thing ever."
It always felt harsh and personal and deeply problematic. It felt like you had failed. I'm done with that. I don't believe in that at all. I reject that idea entirely. If someday I'm not a good fit for SparkToro anymore or Casey isn't or Amanda isn't, it's just that. "Hey, Rand, it's been a good run. You got to go." So what? You can get another job. We're in, what, a three and a half percent unemployment economy in the United States? And in tech, it's negative 50%. The demand is outpacing supply so much. I just don't see any reason to work at a place that doesn't match with what you need and to have people at your place of work that don't match what you need. Just move on.
That's very profound, and I assume you have this written down in like some values or something that you're sharing with the team where you just be like, "Well, it turns out I have this brochure and you're not making the cut, so no," but also from your time at Moz too, of like that, nobody was really talking about the warts and nobody was talking about the gritty stuff and then it boils up. And then there are huge swaths of people no longer there because no one was addressing it when it was happening. That's awesome that you are upfront about that now, and be on the level with everybody, even though it's only two other people and yourself, but I assume that also works with your vendors too. And it's like, it's not a good fit and you cut ties early.
Yeah. We have worked with a lot of providers, I think probably close to two dozen agencies or consultants or contractors on some project to another. Some of them did a great job, one time and we never needed that work again. Some of them did an okay job on some work and we needed it again, but we decided we'd try another vendor. There are no hard feelings. I don't think that means that they're a bad vendor or I wouldn't recommend them, that just means it wasn't the perfect fit for us, and that is just fine. Let's say that you're out there dating, just because you go on a date with someone and you find that there's no romantic chemistry, that doesn't mean they're a terrible person. They're probably going to have romantic chemistry with someone else and you hopefully will as well. That's just not a judgment call, it's just a chemistry match.
I think the same thing is true in vendor or contractor or employee-employer relationships. It's, do we work really well together on this thing? And if the answer is no, there are many people. Life is long, there's plenty of time. If you're not a venture-backed startup, there's plenty of time to go figure it out. I think that's the other thing. We give ourselves permission to just punt on something and that's not working and go take more time to do it. Like, "Hey, we recorded a podcast episode. It was boring. It didn't hit. You know what, let's not launch our podcast for another few weeks. We'll record it again next week. We'll see if that goes better." Great. Right.
You take the pressure off and the results get better and you get to focus on what matters, which is delivering the quality product rather than some arbitrary timeline. I think that's a really beautiful thing, and if you can do that in a reciprocated way, Ben, that's when I think it means the most. Great example, we're working with, do you know John D. Saunders from 5four Digital? Awesome guy, building really cool businesses. He runs 5four Digital. He also runs blackillustrations.com, which is this super cool repository of visual illustrations that companies of all kinds can use that represent black people. Most like illustrations are just all people who have skin tones like ours. It's a little weird like, "Huh, is every human being like us in the illustration world. Why?"
Anyway, that business has done phenomenally well and I met John through some contacts or on Twitter and then started working at their firm. I was actually in Costa Rica, had the kickoff call with their company and we started doing some work together. And then there was this slow period of a couple of weeks where they were behind on some other client work. They were like, "Hey, is it cool, we're going to take some time on your project?" That's awesome. That's so great. Because then, two weeks later when they actually finished some deliverables early and I didn't get back to them for a week, I didn't feel guilty. It was like, "No, no, sometimes it's a little slow on your end, sometimes it's a little slow on my end." But you know what? We still wrapped this project up in like six weeks, and at Moz that would've taken like six months, so I feel great about it, like fantastic. We have a new homepage and a new product page and it's going to be beautiful.
Yeah, man, you are just chill through and through. Like, how did you get this way? Did you go into the mountains and be with some guru and just constantly meditate? Or how did you adopt this chill?
Oh God, no, it's actually the opposite. I think the interesting thing is, I believe that a ton of this intentional design around chill work and attempts is because of the deep unrelenting neuroticism that resides in my soul and this sense that, I have felt my whole life since I was a teenager that, it's one of those things you can't get it out of your head. I don't know if you have things like that where your parents told you something about yourself when you were a kid and you can't let it go, it is with you forever. The thing that my dad always... I remember he would describe me to other people, even when I was there, as high potential, low achiever. And it has all always stuck with me.
I have always felt like I'm not that low achieving. I'm doing okay in life. I have a very successful marriage and Moz, it wasn't quite a venture success, but it did okay. It did better than 90% of venture startups, just not in the 1% that makes it. I have always felt like I could be doing more. I could be better. I know if I just applied myself and made some smarter decisions and really put my notes to the grindstone, I'm like, "I could crank it out. I could get to high achievement status." The older and more mature and wiser I get, the more I'm like, pardon my language, "Fuck that whole thing." Just no. I want to be done with that side of me that believes that high achievement professionally is the only thing in life that matters. I want to be done with that idea. Just finished with it.
I know for a fact, because by circumstance, Geraldine and I have friends who have made tens and hundreds of millions of dollars, even billions of dollars, and I think our life is better. I don't mean that offensively or anything, but the complications of whatever that wealth and in some cases like the weird, I don't know if you have friends like this Ben, but they get a lot of money and then they get kind of weird. Success comes with weirdness, just like loss of humanity, empathy, strange new political beliefs, all sorts of weird stuff.
I don't need to be part of that. I don't need to value that above, "Hey, can we go to Italy next week so that we can be there for Geraldine's new nephew's third birthday where all her family is getting together in Milan?" Holyshit. That means so much more to me than another million dollars. I can't even describe what that means to me. I can barely understand what's happening, like in the family gathering, because I speak like this much Italian, but I love it. I understand vino, pasta, mangia, mangia. Great. I'm happy. I'm there for you.
I love that you are just detached from the outcome and just experiencing joy as it's coming and not having that looming over your head of living in the gap or that you're comparing yourself to other people because I think that's where a lot of folks get into trouble and they get in that depressive cycle and then it’s just eating them away at times. I'd be remiss if we didn't dig into a bit of marketing stuff because you are a marketing maven and there are so many options out there of affiliate marketing, influencing marketing, inbound, content, all those things that can help drive more traffic and increase growth. And not every company is the same, but what are you seeing SaaS teams doing to help with their growth in the marketing concepts or context and how are you all doing it at SparkToro?
The second question is, I'll answer that first and then I'll go to what some of their SaaS teams are doing. You're right, there are a lot of options. You can invest in ads, you could do PR, you can do content, you could do email, YouTube, whatever you want. Casey and I basically looked at the universe of audience research. The problem we help people solve. From the perspective of, what's that industry like? Who are the key players in it? What are the competitors? We interviewed and surveyed a whole bunch of people. I probably had, I want to say, close to a hundred interviews with marketing agencies, consultants, and in-house folks after I left Moz for like that first year when Casey was building the product and I was just going around and talking to tons of people about this problem of audience research. How do you figure out what your audience pays attention to and how customers learn about the problem you solve and all this stuff?
What we found was that, there is virtually no search volume, so nobody goes to Google and types in whatever audience research software or audience research tools or anything close enough that says, "I already know what product I'm looking for, and I want to go find the best one." Even sophisticated marketing people don't even really know that this data is possible to get, nor once they get it, how to apply it. Our challenge became, educate the market, and luckily I had some experience with this because, Ben, when I started Moz originally SEO Moz, nobody knew anything about SEO. I shouldn't say nobody, there was a small, but very insular, we're talking like 5,000 people worldwide, total, who did anything with SEO in 2002, 2003. So that market education process was absolutely huge. It took a decade.
And that's what I figured with SparkToro as well. Audience research, educating people that, "Hey, you should go talk to your customers, in the ways that they understand, in the places that they already pay attention, through the sources of influence that already reached them." That's your best opportunity to do marketing of all kinds. That was going to be a huge education process. In terms of what I'm seeing other SaaS businesses do, I think there are a lot of companies that are built around essentially an ads and lead gen sales system in the SaaS world. It can work, but it's a very high friction, low leverage ecosystem and flywheel that you're building. Every revolution of the flywheel is both very expensive and quite time-consuming and it does work because some SaaS businesses have a product that is perfectly right for their market and they charge enough to where they can make the economics viable.
I don't love it, because that's a very human-intense process and it's a very resource-intensive process, meaning you've got to either raise or have a lot of money to make it work, which is why most SaaS businesses are venture-backed. But I try and stay away from that ads ecosystem in general. I think Facebook and Google, their incentives, speaking of incentives are, "Hey Ben, are you getting a dollar of margin out of this product? We would like 99 cents to advertise with us. Next year, we'd like 99.90 cents." I'm not really interested in that.
SparkToro hasn't spent anything on advertising basically. We've done no programmatic ads of any kind and just a few sponsorships of things here or there, and very frankly, I like that model. What we do is essentially the same thing our product helps other people do, which is go find the sources of influence that our audience pays attention to and then be present in those places. People listen to the Get More Done podcast in the marketing universe, "Hey, Rand, you should go on Ben's podcast and chat about SparkToro a little bit," it's that kind of thing. Podcasts, YouTube channels, blogs, email newsletters, a lot of Twitter and LinkedIn, which is where a ton of marketing conversation is concentrated, that's essentially our marketing flywheel.
That makes total sense of just providing that education and being just in the conversation with all of those. But you mean, you hit on so many things, how are you able to do all that with either yourself and your team of three? How are you structuring your days and how are you able to get that all in?
Most days when I'm at home in Seattle in this office, which is just a shed out back of my house, by the way, I do probably, 60% of my day is those kinds of things. It's like every week or two, get up a blog post, and generally spend an hour to 90 minutes on some combination of Twitter and LinkedIn, both listening and engaging and posting. I'm answering a lot of emails and many of those are, "Hey, I found this thing that you're doing really interesting" or "I liked your book" or "I saw this post from you on LinkedIn. Would you want to give a webinar to our students at this marketing program? Would you want to come on this podcast?" There are lots of invitations and opportunities and I try to schedule those that I have a few every week.
Amanda does very similar things. She gets a lot of invitations now, especially because her public social profile has grown so rapidly. She's almost internet famous in the marketing universe these days, which is super cool to see. We also do, I would say a good amount of investment in our core marketing funnel function on the website. So looking at things like, when people hear about SparkToro, the first two things they do, they go to sparktoro.com, they type it into their browser or they type it into Google and search for SparkToro.
We have almost no search traffic apart from branded. Literally, if you look at our Google search console report, it's ludicrous. It's basically like SparkToro, SparkToro tools, Rand Fishkin, SparkToro software, and that's it. That's 99% of our Google traffic. We get almost no SEO at all. It works okay because we're present in all these places. It started a flywheel going where now it's become almost a word of mouth thing. For example, I mentioned I was in California last week and visiting a bunch of family. I wasn't really present at all online, a little bit here and there. Maybe a couple of tweets and SparkToro, we still had just about the same number of people coming to the website and going through the signup process. And so that's where we spend time optimizing like, "Hey, let's make the homepage better." "Hey, let's make a good video that introduces the product." We have this fun, fancy video. Casey and I went to a wedding venue up in Marysville, Washington up north and filmed this fun video with a crew.
It's cheesy, but it's our personality. You really get the sense of: this is what SparkToro's about. I think that's another big part of it, Ben. In the intentional design side, when you build a business in a way where you essentially say, “We don't need to maximize for growth at all costs,” we can build this business in the way that we want. We can do a lot of things like, "Hey, even if SparkToro might be a right fit for you, but our style of marketing, our style of communication, which is very informal. Very like we're friends. There's a little bit of humor always. If that doesn't resonate with you, because it's not professional enough or it doesn't feel like a right fit, too bad. Go away. Go find some other company to work with." That's fine. We don't care, we don't need to have everyone as a customer. We want the right fit types of customers.
Very frankly, someone from Microsoft reached out and they're like, "Hey, would you apply through our Microsoft vendor program?" I was like, "Oh wow, I'm honored that you want to use SparkToro. I will not jump through the hoops of using your vendor program, but feel free to sign up with a credit card." And I think the person was like, "Wait, what? We're Microsoft. You want us as a customer?" No more so than I want 5four Digital, the 10-person agency, as a customer.
Right. It makes total sense because you don't have the capacity to jump through all those hoops for those folks, and it's like, it's off the shelf. You either want it or not, if not goodbye, and if you do want it, here are some other educational materials that will help you. So good. You briefly touched on, in a previous conversation of the people-first organizations and all of that stuff, so with that in mind, in your opinion, what makes a good leader?
I think it's really different in different organizations. I don't think there's one definition of a great leader. I don't think there's one quality where if you have it, you are, if you don't, you're not. It totally depends on who you're leading and where you're leading them to, and why you're leading them. If you were to take me out of SparkToro and put me into another several hundred person growth at all cost startups, I'm not sure I'd be a great leader. I think I make quite a good leader for SparkToro, but not necessarily a great one for Coinbase. Not that Coinbase’s leadership is necessarily doing all the things that I agree with, but I think this is one of the challenges of building a company of any kind, is recognizing that it's incredibly customized.
I think that's actually a beautiful thing. This is one of my favorite things about capitalism. I have lots of complaints about capitalism. I think there are lots of deep problems with it as a structure. But one of my favorite things about it, absolutely is that, if there's a market need, you can do virtually anything that you want in the way that you want. If it contributes economically and people find it valuable and they want to exchange their money for what you do, you have the freedom to do that and you get to do it in the way that you want to design. The United States is particularly friendly to this type of thing. You can build businesses in a jillion different structures and have lots of options, so take advantage of that. Take the bad with the good, but that is one of the good things about it. I'm sorry. I apologize. That's not a great answer to the question, it's just how I feel about it.
Yeah. But that makes total sense because it's the objective of where you're at and what's happening and what pressures are coming and all of that stuff. But I think we both can agree that if you're focusing on the people that you are working with, only good things are going to come from that, because as you've seen, just chasing profits can lead to some problems, right?
Yeah. Look, there are absolutely organizations that technically are financially successful by pursuing growth, financial growth at all costs and I think that's where companies like Facebook or Goldman's Sax or Exxon, that's where those companies come from. If that is the kind of company that you want to work for and with, and want to build, Hey, I don't agree with it, but our economic and political systems let you do it, so go to town. Probably, you're not listening to this podcast. You probably turned it off a while ago, but that's okay.
I think this is probably the one thing that is true across all great leaders. Now, I'm coming back to like, “Okay, maybe there is a universal,” which is, you have the self-awareness to recognize the organization that works well for you and that you work well inside of. And then you have the courage and commitment to design the organization's structure to fit with the type of leader that you are and the type of goals that work for you. And you have the wherewithal to hire the kinds of people who work well inside that environment and to let go of people who don't.
Yeah. Having a good fit and making sure that you can grow into that, for sure. Apart from celebrating a birthday party in Italy, what's next for you? What are you excited about and doing this video game thing too? Apart from all of that, awesome, what else have you got going on?
Yeah. The video game has been very, very fun and exciting. Super huge learning curve on that. This week I was reaching out to a bunch of artists, mostly that I found via Instagram, who were trying to nail down a creative art direction style, and that process has been fascinating. Apparently, most of the illustrators that you find out there, they all work with agencies. They're represented by agencies the same way an actor or an author might be, so that's been an interesting process to go through. That project, it's super exciting and I would love to talk more about it, but the challenge is video games take a long fricking time to build. It is probable that the game won't launch for another three years, even though we're almost a year into the early concept development now.
It's just a long process, but it will be very interesting. I think next year, this time, I'm probably going to be raising money for the game, which is going to be really interesting. A super new type of fundraising process, and a big learning curve there. But I love that kind of stuff, Ben, because I mentioned that trip to Costa Rica or going to Italy to see family. A lot of that stuff is basically living out dreams that I had when I was a kid and being able to make those a reality, finally. I grew up in Seattle, born in New Jersey, but moved here when I was very, very little and lived here all my life and had these dreams of going places and having connections to other parts of the world, and that's been really exciting.
I think the other big thing that's on the horizon for us is, trying to make SparkToro a big enough success to where it can be a model other people follow. I don't need a ton of people to follow in our footsteps, but a huge part of me wants more businesses and more entrepreneurs to feel like there's another way. That the way I talked about in Lost and Founder, and the way that I built Moz, and the way that 99% of tech startups at least try to go, which is how do I raise money? And how do I get investors on board? And how do I scale to become a unicorn? I think that should be the goal for less than 1% of tech companies, and I think right now it's the goal for 95% of them. That is a system I would really like to change. A system of thought in the minds of entrepreneurs and would-be entrepreneurs all over the planet. I want people to know that there is another way that you can build a small, profitable, sustainable, long-term focus, where the goal is, how can we design a business that fits best with our lives and survives for a very long time profitably? Doesn't have to kick off a ton of money every year, it just has to make enough to make you and your employees and team happy, satisfy your customers and keep going.
I think, unfortunately, the reason the venture model is structured the way that it is, where essentially 99 out of a 100 companies who try to raise venture are going to die trying, and then 95 out of a 100 who do raise venture are going to die trying to get to that outcome. I think that structure only exists because the venture world demands hyper-growth and only rewards hyper-growth, and so many businesses, even ones where investors in a few companies that have gone on to raise venture and it's really heartbreaking to get the email like, "Well, we have two months of cash left in the bank and we're trying to grow fast enough in the next 30 days to be able to prove to our next set of investors, that we can raise a few million more dollars. But if we don't get there, then we'll probably crash and burn."
I'm like, "Oh man, if you had kept the burn rate low and just slow and steady, you could have had a SparkToro." I don't know. I think these types of businesses are really exciting. I would love to be able to prove that model out and be an example to more folks. I think that's going to require a few more years of growth and maturity on our end, but it's possible. That would leave me feeling really fulfilled with my career, if a few hundred, a few thousand more folks said, "Yeah, I want to build that kind of business."
Yeah. You're well on your way of proving that model and I'll be your first masterclass, a subscriber, to get that course to digest everything because again, this book was a masterclass in itself of just everything to be mindful of when you're growing and working with a business is really great. Where can folks go to learn more about everything that you're working on?
If you would like a broad range of all the things I talk about from cooking to video games, to marketing to intentional business design, Twitter is probably the best place. That's where I'm most active @Randfish. The SparkToro blog would be second, so that's just sparktoro.com/blog. It's mostly marketing stuff. There'll be some stuff on there about the business design. I've blogged about chill work, planning on writing about our, you mentioned our company values, we now have those formalized. We have a fun acronym: Mochi, like the ice cream, that we use for them and those are probably the two best. And LinkedIn, I participate in fairly frequently, usually every few days.
Awesome. We'll be sure to put all those up in the blog post. Rand Fishkin, it's been a pleasure talking with you. Thank you so much for being on Get More Done, taking the time out of your busy life to spend some time with us, and I hope you have a good rest of your day. Have fun in Italy. Good luck on the video game and all that great stuff that you got coming your way.
I really appreciate it, Ben. All right. Take care of yourself.
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