RAND FISHKIN - HOW TO BUILD A $50 MILLION COMPANY WITHOUT ANYONE IN SALES

Full transcript of episode with Rand Fishkin​​

​​​​

JONATHAN LØW
Welcome to a new episode of Extraordinary. I'm your host, Jonathan Løw. And as always, we promise you extraordinary guests, down-to-earth conversations.

 

Today's guest is Rand Fishkin. Rand Fishkin is the co-founder and CEO of Spark Toro, a software company for audience research. He's also the former founder and CEO of Moss, and a best-selling author.

 

So, first of all, Rand, thank you so much for taking the time to join Extraordinary. I truly appreciate it, and hope you're having a good day so far, and that I'm not going to ruin it in the next 35 minutes.

 

RAND FISHKIN

Now I want to see you try. That would be quite an impressive accomplishment, Jonathan. No, I'm having a fine day.

 

A little bit stressful, but otherwise all right.

 

JONATHAN LØW

And we're actually going to maybe address this part with a stress later, but let's see. And I'm not an investigative journalist or trying to dig deep into problems. On the podcast, we focus on inspiring and helping people.

 

And I've followed your journey on the site, and I've been inspired by it, and probably many people, especially in our audience, have heard about the journey of Moss. But I would still like to address it, and maybe from the angle of, if I read an article where it said that you, I'll just look at my number to get it right, you created a turnover of, I think it was $35 million without a single salesperson. Is that true, and how do you get on a crazy journey like that?

 

Yeah, so I think that's probably quite an old article.

 

RAND FISHKIN

I think Moss, at its peak, when I left, which was 2018, was doing about $50 million in annual recurring revenue and had no salespeople. I believe they did try to build a sales team after I left. That did not go well, and they shut it down.

 

So I think self-service, software as a service, is something that I was always very passionate about and relatively good at. SparkToro, my other company, or my new software company for the last six years, also no salespeople. And obviously, Snackbar Studio, my game studio, has no salespeople.

 

So I'm not a sales guy.

 

JONATHAN LØW

But still, you know, SaaS companies, they will often have models where they want to upgrade you, and then you go to the sales team, and they do enterprise. And then it was double the turnover. How can you build a company like this without having anyone in sales?

 

Like, what's the secret?

 

RAND FISHKIN

To be honest, I ask the same question of salespeople. I don't know how it works. I can't fathom how they're able to get people on the phone and convince them to go through this lengthy upsell process.

 

Personally, I really despise the process of sales. I've met some salespeople who I didn't dislike. But honestly, the only sales I've ever had done to me successfully, where I bought a product from a software provider, it's usually from the founder.

 

So I don't understand how sales works at all. It's a miracle to me that salespeople are able to be effective. I think the key takeaway here is not you can do it without a salespeople, or you should have salespeople, or you shouldn't.

 

I think the key is if you as a founder and a founding team don't have a strong connection and a cultural understanding, knowledge, experience, success with a particular tactic or strategy, you probably shouldn't do it. You should lean on your strengths and your passions and your interests and abilities. I think the thing that took Moz to the place that it got to, which a lot of people think of Moz as a successful company, but its investors probably do not because of the oddities of venture capital.

 

But the thing that's taking SparkToro already to a successful place is that we do the things that we know we're good at. And we ignore the things and work around the things that we know we're not good at.

 

JONATHAN LØW

I know many people who are also like business advisors would say, you're an entrepreneur, you have to be, even though you dislike sales, you have to be good at it. But I think many entrepreneurs were like, it's not my thing. So you have been on journeys where it was not your thing.

 

So to all of the people who feel like that, it's not my thing. And they don't want to listen to people telling them you have to sell. What is your experience?

 

How did you go from nothing to... And I know the journeys from Moz and SparkToro have been very different in terms of funding and so on. But what about the whole, how do you get people on board if you don't have salespeople reaching out to them?

 

RAND FISHKIN

So I'll turn it back around and say, no one has ever bought Netflix because of a salesperson. And yet Netflix has hundreds of millions of subscribers. So we work exactly the same way.

 

Moz worked that way, SparkToro worked that way. We created content like Netflix does. We amplified it through social channels, through going to conferences and events, through podcasts and webinars and interviews and YouTube videos.

 

And back in the days before a lot of social media, we did it through SEO, through ranking and search engines and content on our blog and people subscribing to us through email and dozens of channels. There's so many channels that are not direct sales outreach, especially cold outreach. And all of those channels made people aware of the product and what we did and the problem that we solved.

 

And then when they encountered that problem for themselves, they thought to themselves, I should check out SparkToro or I should check out Moz. I should check out Rand's company, the thing that he's doing, because I recall that they sort of appealed to me and solved the problem that I have. And so they would go find us, usually do a Google search or type in the domain name, or they'd see in their email inbox that we had sent them a message in the last few months because they had subscribed to something.

 

They'd come to our website and they would buy the product because they needed a solution to that problem at that time. And this works for literally millions of companies. Almost every consumer business in the world operates this way.

 

And tons and tons of B2B products do as well. I think sales is one methodology, but it is far from the only one. And it's much less popular today than it was, say, 10 or 15 or 25 years ago when it was kind of the only method of selling a big B2B enterprise software product.

 

JONATHAN LØW

Still want to dive a little deeper because, you know, Netflix, for instance, they have so much obvious, sexy content. And they keep getting like new content automatically as part of their business model. And it has a broad appeal.

 

And then I think many startups that can struggle B2B or especially B2B, but also B2C, they don't feel at least they have a sexy product and they don't have a lot of money for marketing. And I think many of them are looking for this secret sauce because, I mean, you can perhaps explain what Spaktora does, but I hope I don't offend you by saying, you know, it's not on the surface at least as sexy as all the new Netflix series and movies.

 

RAND FISHKIN

Yeah, I would. So I would say that the instant consumerish appeal of something is fundamentally different from the types of appeals that most B2B companies should be going after. I would generally caution you against, I don't know, you know, high resolution, expensive video shoots with famous actors doing, you know, stunts and having romances.

 

That kind of thing is probably not going to attract your target audience. Instead, what is though, what is going to attract them is thinking about your audience as not exclusively being the people who are your customers. So what I mean by that is your audience contains people who are likely to be able to help you amplify your message.

 

They're the type of people who might click share on your LinkedIn post or they might, you know, go to threads and amplify your post. They might comment on something. Comments are very good for reach on social media platforms.

 

They might be someone who runs a popular YouTube video channel about, you know, your particular sector and they'd be willing to have you on as a guest. They might be someone who runs a conference or event. They might be someone with an email newsletter who would mention your new research or your, you know, very insightful blog post or your wonderful, you know, visual display of a problem or your aggregation of a bunch of data that you've made available.

 

And those people, while they are not customers, they are potential amplifiers. And I would treat the product that is your marketing as a product that is designed to appeal to potential amplifiers more so than direct customers who are going to buy from you. And this is the way that I have always had success reaching folks in the B2B world is by making content that is worthy of amplification and taps into the emotional desires of that amplifier likely audience so that they broadcast it to their followers and fans and the people who they're connected to.

 

That is, if there's any secret to successful B2B marketing, that is it. You mentioned not having a lot of marketing dollars, not having advertising dollars. We do no advertising.

 

SparkToro has spent nothing, zero on marketing ever, not a single dime except for, you know, my salary and Amanda's. And we have an audience of, you know, 200,000 people who've tried the free, the free version of SparkToro, 40,000, 50,000 people who subscribe to our email newsletter, hundreds of thousands of people who follow us across our social media channels. And it's because we produce things that are consistently interesting and useful and worthy of amplification across those platforms.

 

The videos we create, the research we create, the thoughts we share, they're compelling and interesting to people and not because, you know, it's an action movie chase scene.

 

JONATHAN LØW

Super interesting because I did another episode that hasn't aired yet with Seth Godin. And we mostly talked about his new book about strategy, but we also discussed, you know, his whole philosophy around tribes and how his mindset is very much that when you build a new product or a service, you should spend like the majority of your energy on your early adopters. And serve them as much as possible, get to know them in depth, but those adopters are your customers.

 

So those are the ones that will help you grow. Sounds like you have a slightly different approach and more like, you know, not so much the tribe, but more like the friends of the tribe because that's a bigger group. And then if you can share content with those friends, it's most likely that the tribe will have confidence in the message because they know those friends.

 

Am I right about that understanding of your approach?

 

RAND FISHKIN

So I think there is great value in what Seth is talking about in terms of building a group of people who care deeply about the problem that you have to solve. And they experience that problem painfully and they need a solution to it. And your product sort of learns and iterates off of them, right?

 

So, you know, for example, with Snackbar Studio, my video game company, a lot of that is playtesting, right? So it's having players play the loop over and over. Do they want to come back?

 

Do they want to play it again? Do they want to play another day in the game? Are they, you know, sort of getting that dopamine hit of fun and engagement and enjoyment over and over?

 

With Spark Torowitz, do people who use the product feel like, oh, that really solved my problem. This is wonderful. When, you know, some friend of mine has that problem, I might tell them about it.

 

But in both of these cases, you know, players for a video game and users of a software tool, there is not a strong incentive and it is not their job to amplify you and your message. That's not what they do. But your job, right, Jonathan, like Extraordinary's job is to amplify stories.

 

This podcast, this series exists to, you know, talk to people like Seth Godin and then amplify his new book. And that audience is one that far too few marketers and founders pay attention to. And that's what I'm arguing is if there is a secret, that's the secret.

 

The secret is making a product, and I don't mean your actual product, but making a product, your marketing, that appeals directly to the influencers, the people who are likely to reach your audience. In the case of video games, this might be streamers and YouTubers and Discord channels and people with Instagram and TikTok followings. You know, maybe some folks are still left on Twitter, not many.

 

But for Sparktoro, it's a ton of LinkedIn. It's people with email newsletters. It's people who run conferences and events.

 

It's people who are well known in the marketing universe. If you can, you know, imagine that person being invited on stage or writing a book or being on a podcast, you go, yeah, I want them to think about Sparktoro when they have the problem that we solve. I want them to know what our product does.

 

And I also want them to have a positive association with us and to get our research in front of them and our content in front of them. And those amplifiers are the ones who can spread it to the rest of your audience for very little or no cost at all.

 

JONATHAN LØW

Can you just explain just briefly what Sparktoro does just so the audience is aware?

 

RAND FISHKIN

I know this will not be shocking after the conversation. Sparktoro is an audience research tool. At the core, you search for a given audience.

 

So maybe people who visit a particular website, people who have a particular job title or role or keywords in their bio. You can search for people who use a particular Google search keyword. So, for example, you might say, I'm really interested in people who have who are who have library science degrees.

 

Right. Maybe you made a new software product for, you know, information retrieval specialists, library science majors. Cool.

 

Great. Where do library science majors hang out on the Web? Like what websites do they read?

 

What podcasts do they listen to? What YouTube channels they subscribe to? Which social media accounts do they follow?

 

What keywords are they likely to search for in Google? What Web pages they go to? I'll be honest.

 

I know nothing about that field. Like I would imagine. Hopefully, you know something about it if you're if you're going into that field.

 

And you could probably name a few sources of influence in there, maybe some conferences, maybe a newsletter or two. But what you really want, if you are trying to reach that market, is a huge list of all the places that that audience pays attention to and with what degree of affinity. And that is what SparkToro does.

 

Right. So it essentially uses a clickstream panel data source. We buy data from Datos.

 

We use LinkedIn profiles very heavily. We have a few hundred million of those. And then we marry that together with sort of Web crawl, YouTube crawl, podcast crawl, Google search crawl data and build this panel that we can pull from so that we can say, oh, yeah, well, we can tell you that, you know, of the 14,212 people with library science in their LinkedIn profile, you know, 62 percent of them or whatever, you know, pay attention to this website.

 

There you go. So that that is what the product is designed to do. Sort of audience research at scale.

 

And that's been going for we started the company six years ago. We launched about four years ago.

 

JONATHAN LØW

So now we understand the product. And I think I have some idea. I worked with public relations for many years.

 

So my PR brain starts thinking, OK, here's a lot of nice content. But then let's talk about, again, these amplifiers. So what kind of content really spread?

 

How did you turn this into not stories about Spark Taurus, but stories that were related to what you guys did and which then seemed to have an impact not only on the brand knowledge, but also like people actually, you know, sharing it and driving traffic?

 

RAND FISHKIN

Yeah. So we do a tremendous amount of content marketing for two people. There's three of us.

 

My co-founder, Casey, is is the CTO. He does sort of all the engineering. So Spark Taurus, a very tiny company, but very nicely profitable and successful.

 

And Amanda and I do nearly all of the marketing and content. And that comes in a wide variety of ways. Amanda does a lot of blog posts that are, I would say, strong sort of spiky opinion pieces about a particular way that the marketing world is going.

 

For example, she coined the phrase zero click content and zero click marketing. And then she described what that is, which is essentially, hey, all the social media platforms and Google and YouTube and all these places, they're not really sending clicks out anymore. Twitter is trying to keep people on Twitter.

 

LinkedIn wants to keep people on LinkedIn. Reddit wants to keep people on Reddit. If you use the internet 10-15 years ago, you remember a very different world where you could go to all these places, do marketing and send traffic directly to your site.

 

And then you could see in your analytics, oh, yeah, Reddit sent me this many visits. I should keep doing that. Oh, this didn't work on Reddit.

 

You can't measure that way anymore. What happens is people consume content on the platforms. You never know how many or how much, right, other than the sort of vanity metrics of followers and views.

 

And then later, when they remember you, they might go to Google and search for your brand name or come directly to your website or get an email from you or whatever it is. And so you no longer have that perfect tracking that we used to have. And so Amanda did this wonderful job of describing this whole problem and the solution to this problem, which is like a lift-based measurement system rather than an attribution funnel.

 

And it took off like a rocket. Now there are literally thousands of marketers all the time talking about zero-click content and zero-click marketing and the zero-click world that we're living in and citing Amanda, right, and citing her work. And so she gets recognized as this industry expert and this thought leader in the space.

 

And when people experience this zero-click problem, right, they go, gosh, I'm not getting any traffic from threads or LinkedIn or Twitter or YouTube, whatever it is. What should I do? Oh, I should do that zero-click marketing thing that Amanda mentioned.

 

Let me go look that up. Okay, what she says is, yeah, you need to sort of understand the places where your audience pays attention and then be active in those places and measure your success based on how many people come back to you. Okay, Sparktoro can help me do that.

 

So, right, the problem as its phrase, the naming convention of the problem, the amplification of the problem, that gets all the attention and awareness from the influential sources. And then the solution eventually leads people to Sparktoro, which is great.

 

JONATHAN LØW

And was Amanda's idea, so was that, you know, you guys sitting down doing a lot of strategy discussions or was that like 50 small attempts until one of them, you know, really gets traction?

 

RAND FISHKIN

Yeah, yeah. More like the 50 small attempts, although I think in Amanda's case, it's more like 20 pretty successful attempts and then one very big one. Nice, can you hire her?

 

Yeah, she doesn't have a lot of misses. She's got a good hit rate. It's really impressive.

 

JONATHAN LØW

So, now we speak a lot about content, which obviously, I mean, your first company was, you know, I wrote down the Wizard of Moss was like a nickname. And of course, you're associated a lot with search engine optimization, SEO and so on. But yeah, that's, of course, a difficult discipline.

 

And we don't really know what will happen, you know, five, 10 years from now, probably in that field. But then there is content, seems like that is a very strong new wave. So you already touched upon it.

 

But what's, you know, like, what's best and worst practice, in your opinion, when it comes to content, apart from obviously not just writing content where you're trying to sell a product?

 

RAND FISHKIN

Yeah, I mean, I think the most popular thing right now is many, many companies trying to save money or become more efficient by getting rid of human beings and outsourcing to AIs. I've never read something from an AI that I thought, I need to share this. This is really good.

 

This never happened. So far, an AI has never produced a piece of writing where I went. God, that is so insightful.

 

Or I just love the voice and the humor and cleverness and thoughtfulness and the creativity that went into it. Nope, hasn't happened once. And you can you know, you can look at the stats around this.

 

There's a few folks who've done stats around like AI content and occasionally a little bit of it will make its way into Google rankings. That's kind of the start of this. But does it get shared on social media?

 

Does it get emailed from person to person and get shared in Slack channels? Does it get passed around the office? No.

 

So that would be one tactic that I would, I would avoid. I think AI can do lots of amazing, you know, data analysis things, programming things. It is a it's a great, you know, engineering assistant, and it's good, good at whatever grammar and spelling.

 

It's good at efficiently classifying large, large sets of data. Wonderful. Use it for all those things.

 

Use those to create your clever content. And if you think AI is going to write you something that's going to get you customers or amplifiers, you're out of your mind. And you know, I think for the last five years now, four or five years, yeah, five years now, folks have been arguing that, oh, well, just give it a few more months, wait till you know, you see what happens next.

 

I don't know, man. I've been waiting. I think AI can get better at certain things, but it is not getting better at at the content creation.

 

And I would say the same thing about generative AI images and video. If you've seen those things, you I can't quite describe it, but it's it now feels cheap. Right?

 

You look at an AI image on a blog post and you go, this again, like this, this person put no effort into this. Piece. Why?

 

Why would I put my effort of reading it into the piece that you didn't put any effort in writing?

 

JONATHAN LØW

There's no diversity, all of this. So we started out as a company, you know, with basically just a more human approach to the photos and we had some traction. Then we went the investor route, which became a problem for us later on.

 

But then obviously with, you know, mid journey and alley and all of these stable diffusion, all the competitors, it was like, you know, you have a group of investors who are saying you, you have to go down that route, otherwise you'll end up as a blockbuster and they will become Netflix. So, so there is a pressure. And then at some point we say, okay, but at least we have some training data.

 

We can, you know, use our big library of authentic images to make this generative AI not look like mid journey. And I think the idea was, was good. But as you described, you know, the problem, it's not so much like the hands holding the cop and the hands looking weird, because that's a matter of training data and algorithms.

 

They're going to fix that. Just like, you know, with, with AI generated content, they have some problems with all the headlines being with big letters and you can sort of detect it if you're used to looking at it. But the next level problems is the one about authenticity.

 

And that is super hard, even though you have enough training data, there's still something in these foundation models. And obviously we were not open AI, so we're not going to build, you know, foundation model. We were more like fine tuning and trying with prompt engineering.

 

But I totally agree. And it's the only company that had to close down. We closed down like four months ago or so.

 

And that's never nice when you're on a startup journey and you spend some years, but it's a really complex game. And we were like, well, we started JumpStory to change something. We wanted more authenticity.

 

Then we came across the paradox of AI. Can you, you know, can you make authentic stuff with AI? Well, if you use the authenticity understanding of making something that makes us more relatable and more human, you can.

 

The problem is just that these, you know, models are seemingly not able to do it. And I don't know if they will be in the future. There is some deeper problems and, you know, open AI, not that we have to go into all of that, but they started, you know, nonprofit open source.

 

And, you know, if we had had access to that, we would probably have had some idea about what's really going on behind the scenes. But now, you know, it's maybe the most closed company in the world and nothing is open anymore. So it's really hard with these AI models.

 

One, it costs billions to build them from scratch. And if you want to build on top of what's already out there, you're going to have a problem. And all of these very used tools, they're still going to experience massive problems with what you described.

 

That was just like my addition to what you spoke about, because I find it super interesting space, but also one that's not going to solve all of these things that they're promising tomorrow.

 

RAND FISHKIN

No, yeah. I suspect you and I are at the vanguard of a larger movement of people who will fall out of love with what's being called AI. And it'll sort of be seen as another tool, right, like a potential tool, an interesting thing.

 

There'll be some companies that, you know, made money from it. But I don't see it being transformative in the way that, for example, the internet was in the late 90s, or the way that mobile phones and mobile apps and devices took off in the mid 2000s. That's just, this is not quite that.

 

This is, hey, spreadsheet software is now available to us, right? Spreadsheet software transformed the world. Like a lot of the business world was transformed by that.

 

It made much more efficient. And I think generative AI is going to do some similar things. But it is not, it is, the hype cycle is way, way, way too high.

 

JONATHAN LØW

But maybe it will open up a second point then about, you know, maybe it will strengthen the people who are really good at creating authentic human content.

 

RAND FISHKIN

I did say, you know, if AI is going to replace any jobs, I'm still waiting. The last one will be comedian. It's, it's the least funny, least humorous.

 

I don't know if you've ever asked, you know, any of the AI models to write jokes, but oh, God, it's just it's horrifying. And I think that that speaks to what human beings resonate with. They resonate with authenticity, with novelty, with uniqueness that, you know, sort of stands out from the field from things that provide them value that they cannot get elsewhere.

 

And the whole thing with AI is the commodification of anything it produces. Anything it produces is suddenly .001 cents per 10,000 calls. So it automatically has lost any, any value, right, if it can do that job well.

 

I'll move on from this. The, the second part of the question that you asked was, was best practices for content, like things that people should absolutely do. And there I would say the thing that has been most successful for me and most successful for the folks that I know in both B2B and B2C worlds is deep empathy for the content consumer.

 

When I say empathy, what I mean is being able to put yourself in the shoes of people in your audience who are likely to come across, see the content, and then asking yourself, when I'm in that person's shoes, what would cause me to want to amplify this further? I read an amazing piece, I watch a video, I play a video game, I listen to a podcast, I see an image, I look through some research. Why do I want to share that?

 

With whom? What is causing me to have that amplification behavior? It's, it can be both logical and emotional.

 

I think the best ones play to both of those. You know, things like reinforcing an existing belief or helping me prove a point to my boss or my team or my client or my loved one or my friend or my spouse or, you know, person I'm arguing with, right, whatever it is. Those types of emotions, getting into that space, having that empathy makes you a great content creator and lacking it makes content that is going to earn attention really difficult.

 

JONATHAN LØW

So that's why you also mentioned that you do, is it your own research or do you have people helping out?

 

RAND FISHKIN

Definitely. Well, I do some of my own research that's, that's almost exclusively me. And then in lots of cases where you see SparkToro publishing, for example, the, you know, the big research studies that went super viral, like the who sends traffic on the web and how much or, you know, what's Google's zero click search percentage or how does dark social work with the different social networks.

 

In each of those cases got some help, like for the zero click research, right? We, we talked to Dados, our clickstream data provider and said, Hey, we'd love to do this joint study with you. Could we get this data?

 

And then I'll analyze, produce all the charts, publish it, talk about it, amplify it, etc. And that, you know, that helps bring attention to their brand as well. So this is one of the things that I think is really a wonderful finding from from the last few years of my marketing work is finding someone who has outstanding data, but might not have an outstanding content platform and isn't fantastic at sort of amplifying it themselves and saying, Hey, let's work together.

 

I'm good at this. You've got all this data. Let's combine our strengths and and co market together.

 

That's a wonderful thing. I love doing that with people of all kinds, right? When when we released the Google API leak, right, which was this huge story that got tons of attention.

 

I think I was on the phone and email with reporters for like two weeks after that. So this this Google API leak thing, when I got that got access to it, I knew that I was not technical enough to truly understand everything that was going on. It's all these API calls, it's, you know, written in particular languages, and a lot of languages quite dense.

 

So I contacted my friend, Mike King, who I knew was in the information retrieval space had been studying it for a long time. He's an SEO as well. And I was like, Hey, Mike, would you would you want to do this with me?

 

Like, maybe we can release this thing together. And you can be the sort of technical point person for understanding and explaining this. And that that went wonderfully to I think it brought him a bunch of business brought us a ton of traffic, it turned out probably not to be.

 

It was not a direct path from that piece of content to something to do with SparkToro. But still, very, very nice way to get our brand in front of a lot of people.

 

JONATHAN LØW

And super interesting approach. I really love it. Also, because oftentimes these people, you know, they might not be the best storytellers.

 

And they might not even feel comfortable about that part. But they would love that all the time they spend on their numbers or their data that somebody can, you know, get access to it. And then you're actually, you know, enforcing some of their work and then benefiting from it at the same time.

 

That's a really strong alliance.

 

RAND FISHKIN

Yeah, I think what's, you know, what's, what's beautiful here, Jonathan is like, when you know, I'm reminded of that. When you want to go far go together. And I quote, and I have I have consistently seen that when I work together with other, you know, remarkable folks who are selfless and interested in, you know, furthering the space and making a difference.

 

That's when we combine into our best stuff. And also, I will bring this up. It's really hard to authentically incredibly pitch your own product.

 

Right. So if I, you know, if I'm on your show, and I say, SparkToro is amazing, and everyone should try it. And you know, you should go and sign up for an account.

 

Well, very frankly, if you're listening to me, pitch it to you. And you're like, well, I, I just don't. I can't trust you.

 

Right? I can't trust you, Rand, because it is your company, you're directly financially benefiting from it. It might be amazing, but you're just not a credible source on it.

 

But if I tell you to go check out, you know, Mike King's research, he's just a friend, I make no money from it. I don't, I get no, you know, personal financial benefit other than the same amount. I get the satisfaction of helping someone that I like.

 

That endorsement is so powerful. Having a third party, a credible third party say something wonderful about you. In a platform where lots of people are listening.

 

There's nothing like it. There's nothing else like it. And I would say that this is that insight alone has led me to the belief that what we have to do with SparkToro is not have me tell the story over and over.

 

Right? When I get on your show, you asked me before we started this podcast, you said, Hey, is there anything that, you know, you want to share with our audience? Do you have any goals?

 

And my answer is always, I want your audience to come away feeling like they got value from this conversation. And you know who they are and what they want. And so, you know, help me to give them that value.

 

Not, yeah, I want to send them to my website to sign up for my product. That it just, it doesn't work that way.

 

JONATHAN LØW

It's not just something you're saying now to spark sympathy. So we actually had that. No, no, that's what I mean.

 

We had that conversation before. And I love that. I love that approach to things.

 

It's kind of like, you know, when people call themselves an expert, I always feel strange, you know, never call yourself an expert. Have a lot of other people call you an expert and people might believe you, you know, but please don't do it the other way around. But, but there are still, you know, so many experts on LinkedIn where they use this phrase.

 

And I always, you know, let me click on and see who has actually gotten some recommendations and shown some good case stories and work with people that I respect or know, and then I'll make the decision. So, so I totally, I totally get it. So time is flying.

 

We have like a four or five minutes, even though we are already over time. But I just want to touch on one thing because we have a lot of entrepreneurs or startups or potential startups listening to this. And now we just, before we spoke about artificial, which leads me straight to venture capital, where we have both had our, you know, unique journeys.

 

We've both experienced stress and depressive times in our lives. And I'm not going to correlate that and say, oh, that's because of evil venture capitalists in my case. But I've experienced, you know, that being on a journey like I understood you had with Moss, where you have venture capitalists involved, you get further and further, at least in my own case, away from one, the sense of true control over what you want to stand for.

 

And you also kind of how you want to build the company, what kind of team you want to build. And then you have the constant thing that, you know, before I started my first SaaS company, I had no idea about what the CAC LTV or, you know, monthly recurring revenue, all of these things. But then I had two years of sleepless nights, not thinking about, almost not thinking about my product or my team, but thinking about these damn metrics.

 

Because when we had board meetings, it's all they ask. They don't ask, how are you doing? Are you feeling good, healthy, stressed?

 

Are people happy in the team? They're like, so what is your ratio this month? And I felt so, you know, alienated from what I originally wanted to build.

 

And I understood from reading a bit about your journeys that you have been on two very different journeys, and you've had kind of the same experiences with Moss. Am I right?

 

RAND FISHKIN

Yeah, really similar. So I think you probably know, I wrote this book called Lost and Founder, which is about feeling very lost as a founder and feeling the pressure to build a billion dollar company as quickly as possible, which I think is negatively correlated with profitably surviving for a long time and producing the best product that you can. And sort of serving your customers the best that you can.

 

And so I would say there is a direct correlation, right? If you are someone who cares about nothing but making the most money possible in the shortest timeframe possible, and that is your sole focus, venture capital is a very good asset class for you. And if you have other things that you're passionate about in your life, or that you want to do with your business, or ways that you want to run things that are not necessarily optimizing exclusively for financial return, which I think every healthy and emotionally honest human being who has been to therapy should care about, then you probably are not a great match for that asset class.

 

And unfortunately, there's not a lot of options out there. So if you're a founder, and you want to raise, you know, anywhere from a quarter million to a million dollars for an idea, even an idea that has a good chance, a very good chance of, you know, kind of getting to a sustainable, profitable level, there's nothing out there for you except venture. Even angel investors, most of them are used to investing in companies that will eventually raise venture and those types of terms.

 

So with Sparktoro, and now with Snackbar Studio, my goal has been to create a new asset class, create a new type of funding structure. I've been calling it like zebra funding or indie funding. But for anyone out there, we don't have much time.

 

So I'm just going to say you can Google Sparktoro funding. We open sourced our documents, which basically raised we raised money from 35 angel investors who put in between 10,000 $100,000 each. After five years, we paid them back their initial investment.

 

And now everyone participates in profit sharing pro rata. So according to their degree of ownership, and if Sparktoro ever sells for some, you know, hopefully nice multiple, they also get their money from that as well. And in this way, it reduces a lot of the risk for the investor.

 

And it also creates a strong incentive for us to operate long term profitably, rather than growth at all costs or die trying. So you can check that out Sparktoro funding, the Google Doc is shared, our lawyers, we paid our lawyers a little bit of extra money to sort of make an open source version that anyone can use. And a few startups have raised using our docs, which is really cool.

 

JONATHAN LØW

You told me before we started recording that you have a stressful day, but but then then there is, you know, stressful days, and then there's feeling absolutely like beep, you know?

 

RAND FISHKIN

No, and yeah, never, never in the history of Sparktoro, have I ever had the absolute panicked fear that was an almost everyday experience, trying to run and make Moz successful. That, that has largely gone away. And I mean, this is the other thing, you know, it's absolutely crazy.

 

Moz was a $50 million a year company, it was it was profitable, it was growing, you know, 2x year over year for years and years in a row, and had raised $30 million, right, all the like all the signs of success, supposedly. But it never lived up to the promise that I made to our investors, which was, how am I going to get you 10 times your money back in, you know, seven to 10 years? Never, never got there.

 

I think when Moz finally sold, investors may maybe they got 2x their money, the later round folks, maybe their early round folks got five or six, seven, I don't know, something like that. So they, you know, maybe their early round folks were like, hey, it was kind of okay. The late stage folks were like, well, that was a waste, shouldn't have bothered with that company.

 

You know, that was that was pointless. And SparkToro is already a success to its investors. They have their money back, they are going to participate in dividends going forward, the company is still profitable and growing, which means that someday it can sell for money.

 

They essentially made a short term loan with zero interest, and now they own shares in a company that's going to keep paying them dividends. Whoo, you know, hard, hard to beat, man. Like, if, you know, as an investor, I want to invest in companies like that.

 

That's where I want to put my money. So I feel really, every day, I feel very lucky and honored and privileged that we were able to successfully complete that and that, you know, things keep going well. It's just a totally different feel.

 

A stressful day is I have lots of things on my plate, I have lots of things I need to do. A stressful day is not. I think I'm going to let down everyone in my life, including myself.

 

Different kind of stress.

 

JONATHAN LØW

Yeah, and I really want to round off this episode by also thanking you for being honest about that part of startup journey as well. I've decided to, I live in Denmark, a small country in Scandinavia, I've decided to do the same here, share my story openly, also because I remember like there was only two years between being highlighted in a big Danish newspaper as entrepreneur of the year. And then in my case, suffering from a severe depression where I had to spend two months in hospital.

 

And as I always say to entrepreneurs that I talk about, that I talk to who have not tried it, you know, sort of abstract words, you know, stress is an abstract word. We've tried being busy, all of us. Then when you suffer from stress, you find out, wow, this is terrible.

 

And then if it goes into a depression, it's like unimaginable. And you don't have to be a person who has a depressed mind to end up there. So I always try to challenge them to say, listen, I know it's really hard because it was to me hard to imagine what it's like when you feel like that, because luckily you can, but you don't want to go there and you don't want venture capitalists or others pressuring there.

 

You don't want that afterwards as part of your journey. And of course, it's not like you can prevent everyone from ending up there. But I think that when people like you who people know about also dare to share another story and then just the macho one, I think it helps people to still live the entrepreneurial dream, but try to keep in the back of their mind that there has to be a balance in this.

 

It's not my baby. If it goes bankrupt, I can start a new company. So I really want to thank you for sharing that story.

 

It means a lot.

 

RAND FISHKIN

Oh my gosh. No, thank you for giving folks like me a platform for this and for sharing your own story. And I'm so sorry for what you went through.

 

I hope that this next journey, wherever it takes you, turns into something wonderful and sustainable and emotionally fulfilling, because those things are better than money. They really are. It's hard to convince a lot of tech entrepreneurs, but I think the older you get, the more you can see it.

 

And the more you look at people who exclusively chase money, I think the easier that is to see.

 

JONATHAN LØW

Thanks so much.

 

RAND FISHKIN

Yeah, thanks for having me.

​

​

​

​