Rand Fishkin, Founder of Moz & Sparktoro, Investor | The Dark Side of Venture Capital and Startups

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About The Guest

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.

In 2004, he created the SEOmoz blog, which, over the next decade, became the world’s most popular community and content resource for search marketers. In 2007, the company (Moz) transitioned from consulting to software and Rand took the role of CEO.

Over 7 years as CEO, Rand grew Moz to 130+ employees, $30M+ in revenue, and traffic to 30M+ visitors/year. He raised two rounds of funding, led three acquisitions, and a rebrand. Rand stepped down as CEO in 2014 during a rough bout with depression and left the company 4 years later. Rand was also the co-founder of Inbound.org alongside Dharmesh Shah. The site was sold to Hubspot in 2014.

In 2018, Rand founded SparkToro and published, with Penguin/Random House, Lost and Founder: A Painfully Honest Field Guide to the Startup World. Rand previously co-contributed to two books: Art of SEO, and Inbound Marketing & SEO. He’s been profiled in the Seattle Times, featured in Puget Sound Business Journal’s 40 Under 40, named to BusinessWeek’s 30 Under 30, written about in Newsweek, The Next Web, the Inc 500, and hundreds of other publications.

Talking Points

  • 04:58 — Arbitraging Pokémon cards.
  • 09:54 — How Rand built Sparktoro.
  • 16:21 — You don’t need to raise VC money.
  • 24:18 — Bootstrapping vs. VC money.
  • 40:40 — Product led growth, engagement and recidivism.
  • 56:36 — The issues with startup culture.

Show Links

  • https://www.linkedin.com/in/randfishkin/
  • https://twitter.com/randfish1/

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What is the Success Story Podcast?

On this podcast, you’ll find interviews, Q&A, keynote presentations & conversations on sales, marketing, business, startups and entrepreneurship.

The podcast is hosted by entrepreneur, business executive, author, educator & speaker, Scott D. Clary.

Scott will discuss some of the lessons he’s learned over his own career, as well as have candid interviews with execs, celebrities, notable figures and politicians. All who have achieved success through both wins and losses, to learn more about their life, their ideas and insights.

He sits down with leaders and mentors and unpacks their story to help pass those lessons onto others through both experiences and tactical strategy for business professionals, entrepreneurs and everyone in between.

Website: https://www.scottdclary.com

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Machine Generated Transcript

SUMMARY KEYWORDS

toro, people, investors, hubspot, spark, model, startup, world, venture, company, build, marketing, seo, money, product, growth, pay, business, grow, spoke

SPEAKERS

Rand Fishkin, Scott, Scott D Clary

 

Scott D Clary  00:00

Welcome to success story, the most useful podcast in the world. I’m your host, Scott D. Clary. That success story podcast is part of the HubSpot Podcast Network. The HubSpot Podcast Network has incredible podcasts for you to check out like remarkable people hosted by Guy Kawasaki, of course, brought to you by the HubSpot Podcast Network. The remarkable people podcast with Guy Kawasaki helps you better understand the changing world with interviews from thought leaders, legends, and iconoclast. If you are interested in business leadership, entrepreneurship, he interviews the best of the best leveraging connections that he’s built over his career. Here’s some of the episodes and interviews that he’s done. He’s spoken to Seth Godin, marketing God blogger author, he’s spoken to Pat Flynn, entrepreneur power podcaster and popular YouTuber he’s spoken to Jen Lim, happiness evangelist and author of beyond happiness you spoken to Steve Blank, author, entrepreneur and startup whisper if you want to listen to incredibly intelligent conversations with some of the most remarkable people on the planet. Listen to remarkable people podcast by Guy Kawasaki, wherever you get your podcast today. My guest is Rand Fishkin. Now Rand is probably most well known for being the founder CEO of moss, he grew that to over 130 employees $30 million in revenue. Traffic at its peak was over 13 million visitors per year, he raised two rounds of funding, led three acquisitions and a rebrand after Moz he built inbound.org alongside Dharmesh Shah, that site was sold to HubSpot in 2014. After inbound, he founded spark Toro, obviously, he’s had a string of successful entrepreneurial ventures outside of building companies. He published a book last and founder, a painfully honest Field Guide to the startup world. He had co contributed to two books, The Art of SEO and inbound marketing and SEO. He’s been profiled in Seattle Times, he has been named 40, under 40, named business weeks 30. Under 30. He’s been written about in Newsweek, The Next Web, Inc, 500, and hundreds of other publications. So he has been around the block in terms of marketing, entrepreneurship. Obviously, his background was building marketing tools, but now he works with entrepreneurs, as an advisor as an investor. So let’s let me just go through some of the things we spoke about. So firstly, we spoke about some marketing topics, it’s very tactical marketing things, you can’t bring Rand Fishkin on a podcast and not speak marketing. We spoke about some of the strategies that he used at Spark Toro, his most recent venture on how to grow it. And some of these strategies that he’s learned and implemented at Spark Toro, obviously, have come from his success at Moz. And that inbound, we also spoke about some startup and entrepreneurship and startup culture thing. So how to build a more equitable startup culture. Why is that important? Why does startup culture suck now? And what can we do about it? We spoke about some tactical advice for entrepreneurs who are starting their own companies. We also spoke about venture capital, he pulled back the curtain on venture capital and exposed some things about the VC world that may not be all sunshine, unicorns and rainbows. So how does some of the traditions that usually accompany VC and VC backed companies potentially negatively impact the growth or the business that the entrepreneur is trying to build? So some great marketing lessons, growth lessons, entrepreneurship, VC startup lessons, rands done it all? So let’s jump right into this. This is Rand Fishkin, serial entrepreneur, author and investor.

 

Rand Fishkin 04:03

Yeah, I dropped out of college in 2001. My first job was actually working at the Wizards of the Coast Game Center. I don’t know if you remember the little Pokemon cards.

 

Scott D Clary  04:17

100% know what Wizards of the Coast is? Yeah, yes.

 

Rand Fishkin  04:20

So they, they I think they made or they they resold on behalf of the Japanese company that makes Pokemon cards. They sold these distributed them throughout the United States. So they’re based here in Seattle. And they had this these have this like big game center tournament center for playing Pokemon and magic and all the other games that they make in the university district, right, right near where I went to college. And so I was working there over the summer, buying Pokemon cards with my employee discount and then reselling them on eBay and Craigslist. And that is how that is how I paid for my last year of school, before I dropped out two classes away from graduating.

 

Scott D Clary  04:58

So your arbitrage in Pokemon carving.,

 

Rand Fishkin 05:01

Exactly exactly. And, you know, I kind of had this like, affinity for just internet commerce in general. And the idea of the web I, I’ve been doing web design since high school since my mom brought home a copy of Microsoft front page, I think in 95, or 96. And I wanted to do that full time. So, you know, basically got into got into web design was a failing web designer for years and years. My mom and I were working together, but very unsuccessfully, we’re spending way more than we were making. And we eventually pivoted the business to SEO not not through any like genius discovery, but because our clients who needed SEO for their websites that we had designed and built, we were subcontracting that work. We couldn’t afford to pay our subcontractors anymore. Like we ran out of money to pay them. And so it was, Hey, Randy, you have to do the work now. And so I started learning SEO, and I started this blog called SEO Moz. Around, you know, sharing what I was learning about SEO, mostly sharing my frustrations around trying to learn SEO. And then that website, probably about 18 to 24 months into me operating it started to get some real traction and clients were coming to us not for web design anymore, but for SEO. And so we, you know, pivoted the business essentially entirely to that service model. And at that point, things started growing and I was getting invited to speak at conferences and events, and I was building like a little bit of a, you know, tiny niche of a name for myself in the SEO world, which was very small. At the time, people still thought SEO was mostly this Blackhat manipulative, you know, spammy scummy place. And SEO Moz was trying trying to improve the reputation of SEO and, and over time, I think that eventually worked. Basically what happened at SEOmoz switch to a software business from consulting, I became the CEO, we raised some funding, traditional venture funding, over a few rounds, got to about maybe 35 $40 million in revenue. I stepped down as the CEO in 2014, and promoted my longtime chief operating officer to the CEO role and then I was with the company another almost four years, and then then left in 2018. And the next day started spark Toro, which is in audience research and you know, very different sector but still in marketing software. In between those two companies are at this book loss and founder, which a lot of people have read and obviously, you know, you’re you’re part of the world of HubSpot. Right. So I I detailed in that book, the offer that HubSpot made at one point along Moses journey, to buy the company and sort of all work together and that I, I turned that down, which was, in retrospect a very, very foolish mistake. Yeah, so that’s, that’s essentially my career and these days, you know, I’m operating spark Toro, it’s a super different company than Moz I raise money in a different way it is run in a really different way. There’s only three of us instead of 200 of us at Moz there’s a very different philosophy around growth and around the marketing model, and how we attract and build our our customer audience and who we serve. But it’s it’s still marketing software and I like that world a lot. But I’m yeah, I’m trying to like we said in the preamble Scott, I’m I’m trying to not stay in my lane.

 

Scott D Clary  09:02

So it was that was not staying in your lane and something that you incorporate into building of Spark Toro doing things differently. I want to understand how you built spark Toro, I want to understand first of all the inspiration for Spark or why even decided to go into that lane but or that, you know, build that build that company, but also your growth model. Walk me through some of the things that you’re doing.

 

Rand Fishkin 09:26

Okay, I’ll try and answer the first question first and then the second one second. So why sorry, why why? Or how did we not stay in our lane?

 

Scott D Clary  09:41

How did you What did you do differently? What did you do differently?

 

Rand Fishkin 09:44

With Spark Toro? Yeah. The list is so long that we I would spend the rest of this podcast explaining it to you.

 

Scott D Clary  09:53

What are the main ones? Yeah,

 

Rand Fishkin  09:54

yeah, I’ll pull out some some big picture ones. So spark Toro is Built for profitable long term survival, not growth at all costs, high riskiness so traditional venture startup model right, which which I’m sure you’re familiar with, right. You know HubSpot was this model mas this model 100,000 other venture backed startups are all this model, which essentially, you raise money with the expectation that you will attempt to grow as fast as you possibly can. And that you will do so unprofitably, I think I think I saw from HubSpot latest results, like they’re, they’re a public company now. But they’re still unprofitable, right, they lose money every quarter every year. But the idea is that their their growth rate means that investors are willing to fund that unprofitability with the hope that eventually, they will be like Amazon was after 19 or 20 years, right, extremely profitable, at some very, very large growth rate, because there’ll be a monopoly player in their space, and they’ll, you know, remove all competition, and then they’ll be able to charge higher prices and, you know, essentially a corner of the market, and that that model has worked very well for investors, because the United States tax code rewards, growth, over profits because of capital gains, right. So if you and I, you know, start a company and it grows a lot and we sell it, we pay $0, on the first 10 million of, you know, money that we make, and we pay 18% 16%, whatever, on the next, you know, 10 to $100 million of, of profit that are of sale revenue that we get, but if instead, every year, that company kicks off a million dollars to it, and we run it for 50 years, we’re paying 40%, or whatever, you know, maximum high tax rate for ordinary income is so investors, right? wealthy investors, LPs, that the limited partners that back venture, public market investors, hedge funds, all these people, they don’t want profitability, they want growth, because that’s, you know, that’s how you get capital gains tax rate. And so you’ve probably seen that the Biden administration has proposed, potentially making the the capital gains tax rate the same as or as income, which would be absolutely revolutionary to the world economy. That would be very strange. I don’t, I don’t think we understand at all, well, everything that would happen. I think it’s great idea. But I know lots of people don’t like it. But so in that in that model, right? Essentially, your job as a startup, right, if you and I invest in a startup, what we want them to do is to try to become a unicorn, or die somewhere on the way there. And both of those outcomes are fine. What’s not really fine with us is if you get to, you know, a few 100,000, or a few million in revenue, and you’re sort of happy, and content, and you have a profitable business, and your customers like you and your product, and your employees and team are happy and you’re happy. But you’re not growing, or you’re not growing very fast. And you’re not also dying and going away and getting off our you know, our reports, both of those outcomes are fine. The middle one, the sort of happy long term profitable growth, not good, it’s not good for our model, it doesn’t fit in there, there’s no place for it. And I that that is the biggest thing that spark Toro rejects. Right, the biggest thing that we reject is the idea that you have to be, you know, grow it grow as fast as you possibly can at all costs, or die trying. I say die. Death of company, right? Bankruptcy. Yes. Not Not, not literally no human beings, right? Yeah. But this dot model, I think, is only good for a portfolio theory. Right? So essentially, if you and I own 100, companies like this, and we probably don’t want to very well, if we own 500 companies like this, we’ll start to write the the averages, the portfolio theory of it says there’ll be two to three huge winners in that group of 500. You know, there’ll be 480, complete failures. But those those two to three winners will make up for it. And and then there’ll be maybe 10 or 15 that do pretty well. Right? And so those two or three, whatever the the Airbnb and Uber will make up for, you know, all the all the other bells. Yeah, yeah, everything else. And that portfolio theory works great for investors and works terribly for entrepreneurs. Because if you and I start a company, and we’re told, Hey, you got like three and 500 chance of making it. You’re like, well, what? What happens in the other cases, well, and 485 of those cases, things are going to go pretty bad for you. Like, you’re going to be real sad. You’re not going to make as much money as you would have if you just gotten a raise Your job, it’s going to be a stressful, very emotionally turmoil filled adventure and your employees are going to be very unhappy, and your customers are going to be very unhappy. And your investors are going to be unhappy with you. But it’s fine. You go away and die and be the failure because you’ll help us find who the few winners are. I think that model sucks. Terribly. No, I want I have all sorts of swear words I want to use about that model,

 

Scott D Clary  15:33

you can swear as much as you want. But I think I think the point is that nobody entrepreneurs, this idea, there’s a lot of ideas around entrepreneurship that I don’t think are, are discussed that much. And even when we were doing the preamble, it was like, Okay, you wanna talk about marketing, or you want to talk about all the other things that have to do with entrepreneurship, I get a lot of people talk about marketing, I’m sure you have some great ideas about marketing my god, like we know, we know the past, know the history, you’re in this space, you’ve been living in this space. But I think that the the ideas that you champion around, around entrepreneurship are very important, because it paints a very pragmatic picture for people that want to start something, and potentially are just just looking to go find VC money, and think that that’s the only path that they can take, which it’s not, it’s

 

Rand Fishkin 16:21

Yeah, well, and even for people, I one of the my big frustration, Scott is that even for people who don’t raise venture, they build their companies in the media ecosystem, and the echo chamber that is dominated by venture, right, and so even if you are a startup that is, you know, an agency, for example, a consulting business, the concepts of Blitzscaling, and hyper growth and growth, hacking, and, you know, maximizing growth rate of hustle culture, all of these things are weighing down on you, regardless of whether you are actually, you know, in that in that funded structure. So I think this is this is one of my big challenges, right, is that, even though many venture capitalists would say, and they do say this all the time, right, they say, Vc is wrong for 99% of companies. And if you’re a tech entrepreneur, it is marketed to 100% of us. Right? It’s the it’s the ocean that we’re swimming in. So I I think it’s really, really wise to understand why does that asset class exists? How does it function? What’s the goal behind it? Right, the goal behind it is to avoid taxes. And the goal behind that is essentially maximize growth at the expense of long term survivability. So you know, if you look at the Small Business Administration, right in the US, which, which looks at tons of small businesses, so people with whatever, two to 100 employees, the average survival rate over five years is like, I think it’s 55 58%. It’s down a little bit in the last few years because of COVID, and stuff, but the average five year survival rate for a venture funded as soon as you raise that first venture round, or the pre seed or the seed round, that would lead to a venture round, your five year survival rate drops, like 15%. That’s a lot worse than a restaurant. Right? Yeah. So so it is it is a it’s a very strange, strange world, if you are an entrepreneur, and I don’t think it’s talked about enough that, that these these high failure rates exist. There’s also the culture of, you know, I think the whole ecosystem around it creates this idea that, you know, Scott, let’s say you, you start something tomorrow, what, what you’re essentially told is, hey, yes, there’s a high failure rate. That’s part of the game, but you are special. And if you are good enough, if you are a true champion, if you work hard enough, if you sacrifice enough of the rest of the things in your life, and you put your full energy and effort and you devote everything to this venture, you may be able to prove yourself as one of the big success stories. I hate that too. Like that does not work well with my mental model and how, how I want the world to be right I want a world of far more equity and far more distribution of opportunity, rather than maximizing inequality by saying for every, you know, 500 entrepreneurs, there will be two or three big winners and a few who do okay, and the vast majority will fail entirely. I I think that’s what we have in society, American society, at least, overall, right now, you know, if you look at the wealth distribution, income distribution, it’s basically a tiny few massive winners, right? A few, you know, maybe another 10%, who’s doing pretty all right. And then kind of this Oh, man, you do? You know, whereas when we were born, you know, maybe I don’t know how old you are, but 3040 years ago, you really didn’t want to be in the bottom 40% of Americans. Now you really don’t want to be in the bottom 70%. And it feels like we’re going to a place where you wouldn’t want to be in the bottom 90% You know, and another 20 years. That’s ugly. That’s not the world I want to live in. That’s not the world.

 

Scott D Clary  20:42

I want to be version of capitalism. It’s an ugly version of capitalism.

 

Rand Fishkin  20:47

Yeah, yeah. super ugly version. And look, I you know, I think extremely highly of a lot of people who are in that world, right. I have a bunch of investors who are venture backed Dharma Shah, Dharmesh, co founder of HubSpot. Yeah. He was he was the lead investor in Spark Toro, he’s been my friend for forever. I love that guy to pieces. I think he’s a wonderful human being. I don’t love the model of investing that he generally does and supports, right. And he’s had obviously incredible success with HubSpot. And with venture backing. I know he thinks highly of HubSpot venture investors from years ago. And he invests in a lot of startups that go on to raise money. But I don’t I don’t, I don’t love it. And I think I think in order for us to change that, we have to have lots and lots of role models that are showing a different path and doing it well. And that’s, that is the most fundamental thing that spark Toro is trying to be is a role model for a different kind of path. So we are doing our marketing differently. We’re doing our growth differently. We’re doing hiring differently, we think about what we want the next quarter in the next year to be differently. We technically, we are growing at a rate that a venture investor would be excited about. But we don’t have to be it’s almost unintentional, right? It’s sort of like, oh, well, look at this happy accident that is going along. You know, Spark Toro is going quite well, especially at the moment. I’m sure we’ll have some down months in the future. But yeah, that’s not our goal is not hyper growth. My goal is to work 30 or 35 hours in a week, right? I want French or Italian hours. I don’t want American hours.

 

Scott D Clary  22:39

Yeah. All right. It’s like, of course, I know exactly what you’re talking about. If I remember last time, last time I went to, I was I was last last European trip was Vienna, Austria, and the I was on my phone on a Friday afternoon. And everybody was looking at me like I had three heads. Like the fact that I was on my phone on a Friday afternoon. It was just a regular. It wasn’t a holiday. It’s like what are you doing? Like what? What are you working on?

 

Rand Fishkin 23:10

It’s like a zebra, you get off your phone. Look at the beautiful sunset. Look at this incredible plate of pasta before you go to a venue.

 

Scott D Clary  23:18

Let’s go drink.

 

Rand Fishkin  23:21

Let’s go eat let’s espresso get an aperitivo that’s so I mean, I I don’t think I don’t think that at the, you know, at the end of my life. I’m gonna look back and say I wish I’d made more money. I just can’t see it. I just cannot. I wish. I wish I grinded harder. I wish I’d hustled more. Like I don’t I don’t think those are the things I’m going to be thinking about. I think it’s weird that there, maybe there are people who will feel that way?

 

Scott D Clary  23:53

I don’t know. I don’t think so. Well, I think that that’s why you have to find a way. Okay, so let’s let’s break that I want to break down some some tactical advice for entrepreneurs on how they can build a company like Spark Toro, because everybody, like you said, is marketed and they’re in this ocean of VC investment, or if not VC investment, then okay, I have to bootstrap. But there’s not a lot of bootstrap success. There are some but I mean, there’s not a lot. So how do you

 

Rand Fishkin 24:18

Yeah, and these are not the only two options, right? There’s a whole bunch of stuff in between that is poorly understood, and not well marketed. And not. It gets very little press gets very liberal media and for obvious reasons. Right. It’s just there’s not that much of it. And also, it is rarely the case that those people have power, influence and wealth to impact media in the same in the same way. Right. So. So what I would what I would urge folks to think about is in the structure of your company, you can raise money from investors private or crowdfunded. In ways that let you build the kind of company that you want to build. And there are supportive groups of investors who are like, like myself, right or looking for opportunities to fund companies that have a, hey, we’re going to exist for a long time. Our first priority is sort of paying back our investors their initial sum, this is this is how the spark Toro model works. We raised $1.3 million from 3536. Angel investors, they’re mostly folks. Gosh, from my personal network over the years, so you, for our model, you do need accredited investors. But there are innovations on that model that let you crowdfund this, the same sort of thing. You can look at what Sawhill Len gavia Did SHL on Twitter, and he, you know, he basically built a fund structure that that’s a little more crowdfunding style. But those 36 investors put in between 25,000 and $100,000 each. And our goal at Spark Toro is essentially to become profitable, which which we have been for a while now, and then pay back that 1.3 million, at which point everybody gets to participate pro rata meaning to their amount of shares, in profit sharing. So if we make, you know, $100,000, in profit, for 10 years, everybody, you know, all the investors get to split, whatever it is 35% of those profits and founders get to, and employees get to split the other part. Hopefully, right, our hope is that spark towards a several million dollar a year business, maybe even a $10 million a year business, and that our profits are seven figures, right, and that we can pay out that money every year annually. And that compounded over time, Spark Toro will actually be one of the best, maybe the best performing investment in our investors portfolio. And the only downside, the only shitty thing for them ordinary income taxes, right? You don’t have to pay ordinary income taxes on the money that spark Toro makes them. But if you can find, you know, sort of tax progressive investors, right who believe in this, that the one nice thing is if and when spark Toro ever does sell, right if it if it’s acquired by some other company in the future. Good news. On that money, our investors will get capital gains. So

 

Scott D Clary  27:36

So you set up multiple exit options, or no exit options?

 

Rand Fishkin 27:40

Option? Yeah, exactly. And what’s the end? What’s the goal, right, the incentive for us is essentially, keep costs slow, get to profitability, maintain profitability for a very long time, keep our team happy, keep our customers very happy, invest in true long term thinking right 1020 30 year thinking, because we don’t have to worry about 18 months from now we’re going to run out of cash, how do we get our burn rate down far enough that we can survive? Or how do we raise our next round of funding, because realistically, we have to raise our next round of money. And that is virtually every startup I’ve ever been involved with is our, you know, we have this many months left of survival. That I find that model, incredibly tense. And I don’t think it predicts the best performance from you and your team there, right? They’ll there are people who will say, hey, it keeps the entrepreneur hungry, it keeps the team hungry, they know that they’re out of a job, that they’re screwed that their life is, you know, doomed to be bad, right? That they’re not gonna have health insurance, and they’re screwed. And

 

Scott D Clary  28:48

think about that. If you think about that, that’s the way that the person that you’re partnering with for your future is thinking, right off the bat, you’d be like, I don’t want this.

 

Rand Fishkin 28:57

I don’t want to work with them. Yeah, you don’t want to work with someone who basically says, Hey, if you don’t reach these milestones, and get that hypergrowth going real, real fast. Your life is gonna be bad. And that’s what I want for you.

 

Scott D Clary  29:12

Yes, that’s not fun. And that’s one of the biggest issues that people don’t realize that their version of entrepreneurship is not like that version of entrepreneurship is not what has to be definitely not what they want until they’ve taken on that first round of funding. And now they’re now they’re stuck. They’re stuck with these people that they can’t get at. And that’s the number one thing I tell people like if they’re looking to raise money, like you better be damn sure the people you’re getting into bed with are the people that you want to work with long term. And I think that early on, they don’t think they don’t think through and they just jump into whoever’s going to give them an offer. And that’s scary. I just want to take a second and thank the sponsor of today’s episode Express VPN. Now I know most of you are probably thinking why don’t I just go incognito mode? But let me tell you something. Incognito Mode does not hide your activity. It doesn’t matter what mode you use, or how many times you delete your browsing history, your internet service provider can still see every single website you’ve ever visited. That’s why even when I’m at home, I never go online without ExpressVPN. And it doesn’t matter who your internet service provider is, ISPs in the US can legally sell your information to add company. So what is ExpressVPN? will express VPN is an app that reroutes your internet connection through their secure servers so that your ISP can see the sites you visit. ExpressVPN also keeps all your information secure by encrypting 100% of your data with the most powerful encryption available. When I’m using ExpressVPN. I can’t even tell that it’s on, it runs seamlessly in the background. And it is so easy to use, all you have to do is tap a button and you’re protected. And what’s great is it’s available on all your devices. So your phone, your computer, even your Smart TV, there’s really no excuse for you not to be using it. So protect your online activity today. With the VPN that was rated number one by Business Insider, visit my exclusive link expressvpn.com/success story, and you can get three months free with a one year package. That’s expressvpn.com/success story, express vpn.com/success story to learn more. So I just want to take a second and thank the sponsor of today’s episode HubSpot. And with the holidays in full swing, we’re that much closer to a new year, which means new year’s resolution and we often focus on what we feel we fail that health, relationship finances. But what if we tried something new this New Year, and instead of acknowledging what we failed that let’s acknowledge what we did right, the things we want to continue doing more of the relationships we want to show appreciation for and what if we did that for our businesses, HubSpot is challenging businesses to focus on how to grow better starting with our customer because the HubSpot CRM platform is dedicated to making the connection between you and your customers better than ever how well new tools like native payment links, and recurring payments that directly embed in hub spots, quoting tools and emails means seamless delivery, and payment collection and custom surveys easily capture feedback unique to your business, share insights with your teams and help you understand what makes your customers tick. Learn more about how HubSpot CRM platform can help build, maintain and grow your customer relationships@hubspot.com.

 

Rand Fishkin 32:12

It is it is really scary. I mean, I’ll tell you honestly, I thought the world of Moz is investors, I still think that in the venture world, they are some of the best investors that you can find, right? They you know, they’re very entrepreneur friendly, they leverage their networks on your behalf, they’ll give you all the advice that they can, they’ll take time for you on personal issues, as well as professional ones. They’re, you know, emotionally smart people, they they they clearly cared about me as a human being not just an entrepreneur, it’s not the individual, right, the person that that investor is not the problem, when you meet with them, they’re going to be friendly, they’re going to care about you. They are a real human being just like you. The problem is the incentives. The problem is the model, don’t I trying not to blame the individual people inside the model for the way that the model works, right? Because it’s not this investor screwed me it’s this investor just could not can’t realistically break out of the incentive model that they are given and treat me differently from how their you know, financial goals are designed, right? Because they have investors too. They have LPs, those LPs, expect the valuations on that, you know, sheet every whatever it is every year that the reporting is done by the venture firm. So it’s the model man.

 

Scott D Clary  33:36

Yeah. And I think that the the issue is further propagated by the fact that people that are these investors, they make their money from other investors that were part of this model. And that’s the model they know. And it’s a self fulfilling prophecy.

 

Rand Fishkin 33:52

So yeah, right, that there’s not a lot of innovation. Almost no one is trying to break out of this field. We Geraldine and I, my wife and I just had a meeting with Janine sic Meyer from from overlooked ventures right and overlooked is trying to do something really cool. Very innovative for the venture space, which is essentially they exclusively black overlooked and underrepresented, underserved founders, right. So this is, you know, women founders, black founders, native founders, right, that kind of stuff. Awesome, super cool. Mission. frustrating part for us, at least was like same model, same underlying structure and model and I you know, that’s that’s the part that I just can’t get my can’t get excited about, at least so So, to this, you know, the spark Toro model, we open sourced our funding documents so that you don’t have to pay a lawyer, you know, a whole bunch of fees to sort of like recreate what we did. Those are available online. A few startups have already raised money using our documents, and I encourage anyone who wants to if you just search for spark to our funding, you’ll find the docs link to you can apply Even without whatever numbers you want. And then we also invested in a fund called tiny seed, which is backed by Rob walling of micro cough, out in Minneapolis. And tiny seed uses spark Toros funding structure for all of its investments. So it, you know, invest in a whole bunch of companies each quarter and that, that that fund is doing very well, right. Like, the crazy part is the survival rate is so high that and the, the hyper growth of several of the companies does not appear to be negatively impacted, right. It’s not like, well, you know, by having a model where more people survive, fewer people grow fast, that does not appear to be the case. And this was my theory all along, right? My theory is you’re not everyone can win. Every Yes. Yes. Thank you. That’s maybe that should be the title, the next book, everyone can win. I like that. That’s good. I like that a lot. Okay, let’s, let’s

 

Scott D Clary  36:05

let’s I want to, I want to pull out some differentiators in your marketing strategy for Spark Toro, because you’re doing that differently as well. So how are you marketing and growing the company? So we figured out the investment model? Now let’s figure out the the marketing model?

 

Rand Fishkin 36:20

Yeah, yeah. So the interesting thing, right about Spark Toro is coming out of Moz, you would expect that like, well, brands really good at content and SEO. So he’s gonna create a bunch of content and rank really well. And then people will come from Google search, and they’ll they’ll find spark Toro, and they’ll they’ll give it a try. And we get almost spark targets, almost no search traffic. And nearly all of the search traffic that we do get is for one phrase, or one keyword alone, Spark Toro, almost everyone who who finds us simply searches for our brand name. And that is very, very different than Moz. Right, of course, which was built on this engine of you know what, maybe the inbound folks would, or sorry, the HubSpot folks would call the inbound marketing model, right of like content and SEO and building a flywheel around that that model works great. I’m not against that model. It’s just not how we’re doing things. And that is mostly because spark Toro is not something anyone would know to search for. So we, you know, we haven’t talked about what spark Toro does, specifically. But essentially, I mentioned it’s audience research, it’s essentially you go to spark Toro, and you search for a particular online audience. Like, I want to know what chemical engineers in the UK, what podcasts they listen to, and what YouTube channels they subscribe to, and what social accounts they follow, and what websites they visit, right. And you can do this with with virtually any describable online audience. So it’s not search data, it’s essentially behavioral and demographic data, that is crawled from public social and web profiles. So spark Toro has this, you know, idea of a forever free account different than Moz, which was a free trial model, you can just sign up get forever free access every month, run a bunch of searches, the that is the primary driver of growth for us. So essentially, people sign up, run free searches, have some good experience out of that, get some, you know, value, some real value from the free version. And then over the months and years ahead, they do two things, they share it with other people, they’re like Hey, boss, Team friend, you should see this and secondarily, they come back and try it again when they need more audience data. The primary way we have let people know that we exist and you know, figured out that spark Toros The thing is experiences like this one. Literally, we you know, I do probably a few podcasts, webinars and shows and interviews and whatever live chats and social media discussions every week and that is what fueled the spark Toros brand awareness and growth over the last What have you been around for 16 months 17 months that we’ve been live and you know, essentially today we’ve got about maybe 45,000 people using the free version and I think right around 900 paying subscribers. So you know, it’s a it’s a very low cost product obviously. I think it starts at 50 bucks a month is the lowest price plan and then you know, goes up to like 300 a month so even at the top tier, it’s less expensive than like the lowest priced HubSpot whatever, you know any any sort of enterprise marketing product, and that works great for us. Right we have a tiny team we can afford To do that, Amanda, our new marketing architect, Amanda Natividad, she is, you know, helping put together like, bi weekly office hours event, right that we that we do we do some we’re planning on having like a podcast or video cast in the near future. But I’ve blogged maybe 50 times in the company’s existence. It’s just a very, it’s a very, very different model. It’s essentially through influence marketing, right, going out finding sources of influence, making some connection and influence

 

Scott D Clary  40:36

whether the product lead marketing or product lead growth.

 

Rand Fishkin 40:40

Yeah, it’s it’s, it’s that combination, it’s essentially product lead growth. Well, it’s influence that leads to a product that creates a loop of engagement and recidivism and eventual conversion.

 

Scott D Clary  40:55

And do you think that the reason why you’re having such success, I, one of the things that you have spoken about in the past is that there’s a problem with MVP culture? And I think that maybe by engineering a slightly better product? That’s what’s allowed you to use this? Yeah, viral loop of silicon walk me through, walk me through, walk me through, quickly problem with MVP culture, Lean Startup, but then also, you know, going into everyone today, yeah. Then what you do differently? So what was the first iteration of Spark? Toro?

 

Rand Fishkin 41:28

Ooh, okay. Um, let’s see. So I’ll answer that. And then we can talk about MVP venture, okay. First iteration of Spark, Toro was essentially a super early alpha, where I sent queries manually to Casey, my co founder, and you know, our CTO, he basically does all the technology behind the scenes. And I was like, Hey, Casey, can you tell me about, you know, whatever it is architects in California case would be like, Okay, I’ll query the database, and then I’ll send you some, like, here’s a dump of, you know, basically, what’s what’s going on. And then that version was very tough for me to get my head around. And so Casey built a very simplistic UI, that would let me essentially run my own queries against it. And that version existed about, I think, about six months after we got funding, so maybe the fall of 2018, January 2019, somewhere around there. And that alpha version was absolutely an MVP, right? It was, it did a similar thing to what spark Toro does today. Right. So it’s like the early nascent version of it, but there’s no way in hell I ever would have launched that publicly. And that’s, that’s kind of the difference. Right? So I think that, you know, the Eric Ries lean startup model, which is, which is sort of overtaking the startup world in terms of popularity. That model says, once you have a version, like, like that version, that early version of a UI that you you know, built, get it out there publicly see if you can get traction, see if people will pay attention to it and use it and find it valuable. Before you go and do anything else with your company. Can what did we do? We spent another year and a half and $400,000 of you know, sort of our investors money iterating on that before we were willing to launch anything. And that is absolutely contrary to the MVP model, right is super against it. The thing that I think is great about MVPs and I, here’s the in the case, where I was a founder with no following no traction in the marketing world, no way to get my message out. You know, I had no contacts or connections, virtually no network, I probably would have launched that version. I would have launched that super early UI because what do I have to lose? It’s not like the 10 people who are going to see it are going to be you know, hugely impactful on the market. But when when spark Toro did its finally did its launch 25,000 Plus marketers, including many of the most well followed and influential people in that world checked out spark Toro within the first two weeks of its launch. You get one chance, one chance to show those people who and what you are and if they already have an association with you. You will not get a second chance to do that right so it’ll basically be is Rand Fishkin his new thing good. Nope, it’s a piece of crap. So I think the MVP model works great. If you have virtually no You know, marketing impact at launch. And I think it works terribly if you have a substantial, you know, sort of audience that you’re going to be launching to, because that first impression is hugely important.

 

Scott D Clary  45:13

Could an argument be made that even if you don’t have a following that that first impression is still important. And maybe instead of worrying about launching an MVP too early, you don’t go all in on a startup, don’t quit your job. So you can support a more completed product?

 

Rand Fishkin 45:31

Yeah, potentially, I, let’s see, the the way that I like to have my cake and eat it too, in this scenario is many alphas and betas with private groups of people who are invited to test something behind the scenes. And then once they are so crazy excited about it, and they’re obviously using it, and that usage rate is high, and they’re coming back to the product again and again. And you know, they’re telling their friends and asking if they can invite them, then you launch. Right? And so then essentially, you get the benefit of both things, you get, hey, yes, I have some people who are testing this and playing around with it, and validating whether it’s good or not. And also, I get the benefit of when we finally do a public launch. It’s really exciting. This is how a lot of classic industries work. We have some friends who are in the theater world, right? And I don’t know if you’re familiar with like, how Broadway or local theater work, right?

 

Scott D Clary  46:32

Probably not probably, I just watched it if I get invited, but that’s about it.

 

Rand Fishkin 46:37

So so they have this thing, right, where they basically do rehearsals, right, obviously, you know, they’re rehearsing the play, or the musical or whatever. And then some people get invited to those. And then there’ll be a thing called previews, where, you know, if you’re a member of the theater, you can like, Come and see things early, there’s like, yada, yada. And then then there’s opening night, right? An opening night is when press and reviewers and people who are going to potentially amplify and decide whether the finished product is worthwhile, right? And that that’s when you stop sort of iterating generally on the play. That’s, that happens often, you know, 10 to 30 performances after the very first time you’ve performed it for a live audience. Pretty smart, right? Like, yeah, you you have an MVP model, where you launch an MVP to a group of friendly, even if it sucks, and is terrible, they’re not going to like go out and you know, trash you in the New York Times, right? And then you iterate on it, make it better and better and better until you’re ready for opening night. And then you get going. So if it’s good enough for musical theater, it’s good enough for I know, the tech startup world really doesn’t like thinking of themselves as a modern industry. But

 

Scott D Clary  48:05

it’s it’s a proven model that works. Okay. And last last thing that I wanted to pull out was, you know, you are, you have a chief product, product, focus a product lead marketing. Now, if you go a little bit deeper into what constitutes the product. Talk to me about the focus on feature sets and roadmap in relation to what your customers want, versus if you have a VC, traditional VC backed roadmap that you’re trying to achieve. And you mentioned it earlier, how that negatively impacts your customers and how you have customers that aren’t happy with you. So walking through that dichotomy, I just want to take a second and thank the sponsor of today’s episode, get abstract. Now, if you’re trying to figure out where to get information from where to learn where to read, there’s so much stuff out there. It’s like information overload. What get abstract does is it finds rates and summarizes top business books, articles and video talks into 10 minute abstracts to help people make better decisions in business and their private lives. I know you don’t have hours to kill, but you still want to learn you still want to upskill This is where get abstract really helps over 22,000 texts and audio summaries in areas such as leadership, finance, innovation, health and science and many more. If you want to get to the meat of various texts, articles, books, videos, go sign up for get abstract, you can get a free month for all success story podcast listeners, by visiting get ab.li/success that is get ab g e t a b.li/success. So let’s take a second and thank the sponsor of today’s episode truebill. So let me ask you a question. How often have you signed up for a free trial and then it converted into a paid subscription and you forgot to cancel it or how often Have you just not been able to cancel something because the process to cancel that particular, you know monthly service is just horrible and painful and they make you jump through hoops. True bill is solving this for you true bill is letting you fight back against scammy subscription services. truebill is a new app that helps you identify and stop paying for subscriptions that you don’t need, you don’t want or you simply forgot about. On average, people save roughly $720 per year with true bill. And it’s honestly because companies make subscriptions difficult to cancel true Bill makes it incredibly simple. You just link your accounts a true bill and they cancel everything unwanted with a single click. And if something doesn’t cancel automatically, they actually have a concierge service that will follow up and cancel it for you so that you don’t have to true Bill has over 2 million active users. And they saved people over $100 million. I use them myself, I saved about 578 bucks. But that’s just because I spent so much time in the past having to go back and cancel. I’m sure if I knew about them two, three years ago, it could have saved me like 1000s of dollars by now. So stop letting CEOs and bad businesses get rich off you being unable or just forgetting to cancel. Don’t fall for subscription scams start canceling today with true bill at truebill.com/success. Story go right now. True build.com/success story. That’s true. build.com/su cc ESS S T ROI. It could save you 1000s a year that’s true. Build comm slash success story take control of your subscriptions. Yeah.

 

Rand Fishkin 51:38

So first off, I want to say this is not it’s not a universal that a you know, sort of the the classic venture hypergrowth model structure is always absolutely negative for customers, it’s just that the incentives will often create conflict. And sometimes that conflict can be healthy. And sometimes it can be really unhealthy. But essentially what you have is, you know, let’s say today, Spark Toro is serving primarily marketers, agencies, it is serving a lot of you know, consultants and in house marketers at at teams of small and mid sized companies, primarily, a few enterprises here and there, but but not very many, right. And in a venture model, we might, you know, get together with our board of directors, and look at the opportunity and say, Hey, we’re growing really well among this SMB set. But that’s not where the dollars are flowing in the global economy like the you know, because of the structures that we talked about. Most of the dollars most the revenue is going to the very big companies. And so the question isn’t how do we get 10,000 More SMBs on Spark Toro The question is, how do we charge 10,000 times more to Amazon, Microsoft, Facebook, you know what Deloitte, you know, the a ton of big companies who are going to use Spark Toro in the future. And so what we want to instead do is start to move upmarket, go enterprise, build a sales team, make the product ideal for them. That doesn’t necessarily mean that we’re going to make compromises and do bad things for our SMB customer set. But you can see where the tension comes into play, right? The roadmap is essentially focused on how do we get to the next level of growth? Rather than how do we keep making these customers that were already serving happier and happier? How do we make them more and more successful? And by making them more successful, you know, or long term, we have confidence that spark Toro will be a better company for lots more people like them, and that they’ll stick around longer? Right, and that kind of stuff. This is the this is the big challenge. Right. And I know that HubSpot, for example, had lots of conversations around this and had, I think, very healthy conflict around uniserv Do we serve existing customers? Do we go from serving marketers to serving sales people right, and, you know, does that we take our eye off the ball in terms of this? At my old company Moz we had this discussion a bunch Scott and decided made the absolute worst wrong decision, which was, hey, we need to move away from being just SEO and serve all these other marketing practices as well. You know, content marketers, social media marketers, email marketers, press and PR, public relations, marketers, all that kind of stuff. So let’s build a platform for all of these our own Metaverse think that’s the new thing everybody calls it. And, and, and that, basically, we did that at the worst possible time because SEO was growing so fast and our competitors took advantage of the fact that we had taken our eye off the SEO ball and we’re like, Hey, we’re focused on this. And a lot of people move from Moz to a traps and SEM rush and other competitors, and mas lost its market leadership position as a result. So, hey, you know, it’s one of those things where it’s like high risk, high reward. I like the model right now of how do we serve the customers who are finding spark Toro valuable, better and better every month? How do we iterate on that? You know, maybe we have some visionary ideas that are, you know, no one asked for this specific thing, but we think it’s gonna be really valuable to those people. And so we try and build that, in addition to building the things that that we know are being asked for. Right. So the biggest thing that people are asking for right now is more language support. They want German and Spanish and French, and Italian, and Japanese and all these other languages right in in the product, we don’t currently support those. So Casey’s doing a bunch of work to support that. And then we have a visionary idea that maybe people will want to not only search for an audience, but also track it over time. And sort of see like, okay, my audience is changing in these ways. They’ve started following these new podcasts, they’ve started using these new hashtags, they’ve started talking about these new topics, they started sharing these new content. We think that a lot of marketers will be interested in seeing that, but nobody asks us for it. Nobody’s like, hey, I want to track my audience over time and like, get graphs and data of what’s changing. So that’s a, you know, an intuition. It’s it’s a vision for where the product could go. We’re building both these things.

 

Scott D Clary  56:36

And last point on just some some startup lessons or thoughts on startup culture, and then I want to go into some, just some rapid fire to pull out some some insights from your career. How do we build what are your final thoughts on building a more equitable startup? De facto culture versus what it is right now?

 

Rand Fishkin 56:56

Yeah, so I, I think there are this really big question and, and a toughy.

 

Scott D Clary  57:03

I know, but I know, it’s something that you’re passionate about, that I want to ask you about.

 

Rand Fishkin 57:07

And and, you know, there’s also the the difficulty of like, Alright, let’s get the two white Americans sis straight, able bodied white guys together, and, and have them discuss these topics. And that, you know, that alone has its problems. But I do think that that those of us who have benefited from historical inequity, have the lion’s share obligation to help fix the problem, right? We, maybe we ourselves did not create the problem, although arguably, I think we’ve we could say we probably have contributed to it, but we absolutely have to be the solution. And so my feeling is you can’t do this without recognition of the fact that, like, you basically have two options. In your belief structure, right, you can either look at the current state of, you know, generally the world at large, but but even just like focused in on startups and technology and marketing in the United States, and then say, well, either it is the case that almost all of the best and most talented, most qualified people happen to be white men who look like us right and have like our profiles, or there is bias in the system. Right?

 

Scott D Clary  58:37

Like, there’s definitely bias in the system. I think that’s, it’s it’s not really an argument. But in

 

Rand Fishkin 58:43

order to in order to think the other thing, you have to be deeply misogynist and racist, right? You have to be like, at your core, a, I have this horrific hatred of others, and and a belief in the superiority of a very certain kind of person, will you

 

Scott D Clary  59:02

just follow them? I think that is fun. Where does the money come from? And that that leads to bias. All right,

 

Rand Fishkin 59:07

so so so then you start to ask yourself, right, then the, the next step is to find where that bias exists, and that the answer is everywhere. And so you tackle piece by piece, where are the structural biases existing right, and it’s, it’s access to education, it’s access to money. It is, where and how you grew up, and who you grew up with and around and who your friends were at school, and you know, what colleges you did or didn’t get into and what you or your parents could or couldn’t afford. And so fixing those things, is part of our challenge. And then the other part of our challenge, I think, is to say, let’s start to recognize that talent is equally distributed, but opportunity is not and when we realize that what we say what we can say from there is we need to understand that the bar of measurement that we use for people who have had every privilege and opportunity in their life cannot be the same bar that we use for people who have not had that. If you if you started here, and you stayed here, and you get venture funding, because Oh, hey, look, you’re up here. That’s not nearly as impressive as this, you started here and got here. Right? That that is you made some progress. But if you look at the background of technology founders in the startup universe, you will see that almost I think it’s more than 90% come from backgrounds of top 10% wealth. But just like, you know, if my parents owned, whatever gem mines, diamond mines in South Africa, gave me 10s of millions of dollars off the backs of arguably a modern form of exploitative, at the very least, and potentially not that far off of slave labor. Maybe I too, could make rockets. And

 

Scott D Clary 1:01:10

there’s also a lot of I was gonna say, a lot of yes, so that’s 111 example. But a lot of level, there’s levels to this shit too, right? Like, it’s that that’s, that’s one, that’s one extreme, but there’s a lot of wealth that comes and even then if you if you’re brought up in that, in that family that you have wealth from less, less conflicting, you know, jobs and whatnot, say you just have from from regular every day, owning brick and mortar shops, parents, doctors, lawyers, whatever that may be, and you have well, from that, I was just gonna I would the point was, there’s a lot of a lot of people that come from well, if you don’t,

 

Rand Fishkin 1:01:48

just the right, the, I think there’s a huge difference in the United States between like, almost 50% of the population who, if they had a 4000 or $5,000 expense, emergency expense next month, I’ve heard this stuff it’d be over, right, like they’re financially bankrupt, essentially, there’s no way that could afford it, they would be deep in debt for decades to come through the you know, extractive and exploitative payday loan industry and the, you know, nasty suffer. And that, you know, one of my least favorite statistics, horrifying statistic is that if you are a woman in a domestic violence situation, your partner, spouse, whatever is beating you and, you know, threatening you, and you need to get out of that situation. It costs, it costs that woman, something like $750, on average, to get herself out of that situation. And for those women who do who invest that $750, almost all of them in the US go through the payday loans industry. And they will pay over the course of the next three or four years, over $4,000 in interest payments, and that, that keeps them in poverty that keeps them in bad situations. It is gross and disgusting.

 

Scott D Clary  1:03:20

Well, I mean, I’ve never thought that I’ve never thought a thought of that particular stat. But that’s that’s a disturbing. I know that I know, the stats that like if you have, you know, five cents in your pocket, you’re richer than X percentage of the of the population in the US, right, like most people are living day to day in debt. But so just extrapolate on that, and it makes sense. Yeah, but it’s

 

Rand Fishkin 1:03:41

so there’s there’s horrible iniquity, and I think the job of an investor of an entrepreneur of you know, you, you when you’re doing hiring, is to recognize that just because someone is up here, and someone else is down here, your job is to look at the trajectory, not the where they are, I think graduated from a four year school that was very expensive, and they got this kind of degree, so they must be qualified. more qualified than someone who went to community college and you know, had to drop out but has, you know, some skills and showed this grit and perseverance and has, you know, has this kind of a trajectory? I don’t think so. You know, people talk about like, oh, you work so hard. I you know what, I have never never in my life have I worked as hard as maintenance or janitorial staff. Not one day. And and, you know, look how American society rewards me versus them. It’s pretty, it’s really weird.

 

Scott D Clary  1:04:46

Do you know anybody that’s you know, any VC groups, incubators that you’d recommend people I don’t know. I’m putting you on the spot here. So if you don’t have but you know, any that are doing it right?

 

Rand Fishkin 1:05:01

In the venture world there’s there’s not a lot I mean, I mentioned overlook ventures backstage which Geraldine and I are also investors in you know Arlen Hamilton as the founder there. She didn’t she she came from like homelessness herself. Right living in a car. I don’t know a lot of venture investors who have a background like that, which is pretty awesome. And I think that there’s probably a few others, you know, I would mention village capital, clear bank. Gosh, indie VC was one but unfortunately, they their fun shut down. Oh, earnest, earnest capital, I would check out tiny seed. Again, we’re investors now one. But there are a few. And my hope is that more people will think harder about this and think harder about what they want to fund versus how they can avoid taxes. And it’s got a, it’s a it’s a hard thing to change, man. It’s a really hard thing. It

 

Scott D Clary  1:06:02

is a hard thing to change. I was I spoke to his name was Kenan Kenan Beasley if I’m not mistaken. It was a while back. I spoke to him. And he was an he was an investor. But he had opened up for underserved minority groups, like the an incubator, and and he this is what he lives every single day. And I will try and find the name of his his incubator. Yeah, basically. Basically, he’s focused on everything you mentioned. So all the the network, the connections, the family, you grew up with those relations. And it was something along the lines of like there has been, it was some incredible stat, it was like, There’s only been one investment in a black individual at a seed stage for over a million dollars in the history of the US. It was something like so insane, that I like I couldn’t believe it till he actually proved it. Like it was just unbelievable. And I hope my stats are right, but if you if anybody wants to look him up, and Keenan Beasley he’s he, he’s done a couple things. But he is focused on and I had him on a while back now focused on everything that the brand you just spoke about. And his venture is called Venture Noir. And he has some really shocking stats, but he’s a really fascinating,

 

Rand Fishkin 1:07:23

yeah, so interesting guy. But I think the you know, the other thing that you have an obligation to do outside of whatever tech startup world outside of, you know, our little universe is to, in my opinion, if you recognize this historical iniquity, you have an obligation to try and fix that. And, and that means doing it in your everyday life and in your civic life and in your voting and in your charitable contributions. And in your you know, in your, in who you network with and how you help them. So, look at you, you know, every everyone has their biases and their options around this stuff. But it’s, it’s pretty hard to like break out of your, you know, cycle of, Oh, well. This is my friend group. That’s why I want to help. I don’t, I don’t really think about, you know, how am I going to make friends and other communities? And how am I going to get more people in my network? Who don’t look like me? And how am I going to pay them?

 

Scott D Clary  1:08:38

And company hire into your company that? Yeah,

 

Rand Fishkin 1:08:41

yeah. And you know, even outside of your company, right? Just like, yeah, no, no, of course, of course. Yeah. How am I gonna? How am I gonna build those relationships? Like, I think one of the, you know, one of the most disturbing and disgusting things to me is, I think, like, something north of 60 or 65% of white Americans have no black person in their life who, whose like phone number they have, or, you know, that, that they have any type of contact with, apart from incidental they not a friend, not a colleague, not a relation, right. And a big part of that, obviously, is like the white flight of the 50s and 60s where white communities like in the US, you know, intentionally excluded themselves from anywhere where they would have diversity and tried to maintain segregation through kind of economic and geographic patterns. But hey, you, you got to make an intentional effort to do this stuff. And I don’t know I realized I’m like throwing pebbles in the ocean here, but I’m gonna let rides.

 

Scott D Clary  1:09:48

Listen, man. It’s all important to talk about this stuff. And I think that the more is talked about the the more that it’s normalized to talk about this stuff. Yeah. And

 

Rand Fishkin 1:09:59

right At least we can do that at least we can be like, Oh, well, you know, I’m a startup founder and I have a reputation and blah, blah, blah. And I don’t want to get criticized for saying the wrong thing about race or saying the wrong thing about sexism or saying the wrong thing about, you know, trans folks, LGBTQ plus, folks. You know what? You got to at least start to get comfortable with these conversations and be willing to make some mistakes and apologize and be like, Okay, I’m sorry, I’m still learning. I’m going to get there. You know,

 

Scott D Clary  1:10:38

I’m hoping that over the next I think that the US has never been more divided. Due to a multitude of reasons. Obviously, leadership and COVID did not help. But I’m hoping that things are a little bit

 

Rand Fishkin 1:10:52

with the understatement of

 

Scott D Clary  1:10:56

No, I’ve never seen I’ve actually if you don’t know this about me, I’m actually Canadian. And one thing that still shocks me is is the is Oh, no, I can

 

Rand Fishkin 1:11:03

tell from the eyebrow.

 

Scott D Clary  1:11:07

Like, I was like, Is that a thing? You are so slick with that. That was all I you almost convinced me for a second. Anyway, so no, I just I’ve never seen such polarization. Yeah, yeah, we have left and right groups, obviously, as well. But you don’t see the same level of polarization. And that’s something that is very, very saddening, and it permeates much more than just startups. But that’s a whole other. It’s a whole other podcast. But

 

Rand Fishkin 1:11:36

yeah, it’s I mean, that stuff is intense, but, you know, it has negative knock on effects for all of us, right? If you if you think if you think that talent is equally distributed, and opportunity is not, then when you imagine the the sort of world as it is today, and you look at all of the option opportunities that have been missed by the investment class by by the startup world by hiring, you know, in and out of tech. You think to yourself, oh my god, we could have had twice three times as many amazing companies, we could have had way more performance we could have had, you know, not just a more equitable, equitable world but a better world for all of us because we were inclusive and equitable because we recognize talent from across the spectrum. And I you know, I think that the reason that that Geraldine and I put money into funds that specifically serve underserved underrepresented historically overlooked folks is is not exclusively because we are trying to make the world a more equitable place it is also because I am confident absolutely 100% confident that those that that talent is equal or better than the talent than the best talent that you know, current his funds

 

Scott D Clary  1:13:04

are finding Yeah, yeah. Is funded right now. Yeah. Okay. Let’s do let’s do some rapid fire. That was a really good discussion, man. I don’t I don’t know if you’ve I don’t if you’ve planned out to go down that route. But I’m glad we did. That was great. Before we before we do rapid fire, where is the best place for people to go check out you right now? Where do you want to set up website social Alda?

 

Rand Fishkin 1:13:29

Let’s see I Yeah. So if you are interested in giving spark Toro spin, seeing what we’re up to there, getting our funding docs, checking out how we’re building things different and using the like zebras versus unicorns mentality, all that said, Spark toro.com, you can also create a free account and play around with the product. And then if you are interested in following me and hearing all my wackadoodle views on all this stuff, best place is Twitter where I’m at RAND fish.

 

Scott D Clary  1:13:56

Okay, perfect. Perfect. Okay. Let’s go into it. I just want to ask the normally I don’t ask this one Rapid Fire question, but I need to because you’re you’re Rand Fishkin. So what is the single most important marketing concept that you believe has stayed with that is relevant to marketers over the course of your entire career?

 

Rand Fishkin 1:14:21

Whoo. Things that are more measurable, will get more investment and therefore are more competitive, and therefore are less likely to provide an advantage. So paid search, paid social display advertising, basically what what’s called performance marketing, hyper measurable. Almost everyone puts a bunch of money into it. Almost no one can get a competitive advantage out of it. Versus a lot of organic channels, especially things like press In PR and influence marketing and going on people’s podcasts and speaking at events, almost impossible to measure, therefore very easy to build a competitive advantage. That’s great.

 

Scott D Clary  1:15:13

That’s it. That’s it. That’s something that’s a whole other spin on where to focus on marketing.

 

Rand Fishkin 1:15:19

I mean, what do you want? Right? Do you want to be able to prove to your team to yourself to your investors, that your dollars are returning you, you know, some amount of money for every investment? Or do you want the best performance?

 

Scott D Clary  1:15:32

That’s always the best performance?

 

Rand Fishkin 1:15:34

I mean, I personally am willing to not have it be proven to me that my marketing dollars are working in exchange for a competitive advantage. And almost no one’s willing to do that. Which is awesome for me, because it makes all those channels way easier.

 

Scott D Clary  1:15:48

I love it. Great, amazing. Okay, one, the largest challenge you’ve had, and your personal or professional life, what was it? And how did you overcome it?

 

Rand Fishkin 1:15:58

I think the biggest professional challenge for me, was separating my personal identity from the identity of my previous company MAs and just just believing that I could be someone, anyone, anything worth anything outside of how well or poorly that company did. That was the biggest challenge. I think I think I’m probably there today, but I was like a 20 year slog man,

 

Scott D Clary  1:16:31

that’s something that I think a lot of people have trouble with, regardless, even if they’re not building a company, their their own self worth is tied to their career.

 

Rand Fishkin 1:16:39

Yes, separate. I mean, I think this is particularly true for, for men that like, you know, the the world sort of tells you that you’re supposed to be valued based on what you do professionally, and how much you earn and what field you’re in and how it’s going. Breaking out of that is real hard. Hmm.

 

Scott D Clary  1:17:01

Okay, so what would be one lesson that you would tell your 20 year old self?

 

Rand Fishkin 1:17:06

Oh, God, only one. Only one,

 

Scott D Clary  1:17:09

you got to pick? This is the right? It’s supposed to be the first thing first.

 

Rand Fishkin 1:17:13

Okay, rapid fire answer, hey, 20 year old Rand, here’s this book loss and founder just read that you’ll be good. I mean, I basically wrote it as here’s a bunch of advice to young me so that I don’t make all the same mistakes. And you know, a lot of those are in terms of, like, conceptualizing the business differently and how to fund it and how to structure it and how to think about being able to grow and being able to be profitable and long term growth versus short term hacks. All that

 

Scott D Clary  1:17:40

good. What would be a so you’ve had lots of mentors in your life, who was one person that was very impactful. What do they teach you? Man?

 

Rand Fishkin 1:17:51

I mean, there have been Yes, so many wonderful folks. I and so a great friend of mine out in Philadelphia is Wil Reynolds he runs the agency SEER interactive I don’t know if you’ve had him on the show if you haven’t, you should I’m happy to make an intro but will has taught me a ton but but a huge part of what he has taught me is that the the confidence in yourself and the confidence in what you know you want to do with your life does not have to conflate to what anyone else wants or expects from you. That’s a pretty that’s a pretty hard lesson for me because I’m a people pleaser. I want to make everyone like me. I have always wanted to be that. When my parents asked me as a kid, what do you want to be when you grow up? I told them I wanted to be a dog. Because everybody always loves dogs and people are sweet to dogs and they pet them and they’re never mean to them. And so breaking out of I want to be a dog when I grow up has been really hard and will has been the biggest impact for me on that front.

 

Scott D Clary  1:19:04

Amazing. What would be one book or podcast besides your own that you recommend people go check out

 

Rand Fishkin 1:19:12

who man i There’s so many good books right now. Let’s see. I just got I just started reading Amanda Russell’s influencer code. I look at it look at how I have it conveniently just set up. Yeah. Right. And, and that has been a great start. Okay, I read Renly John’s product lead onboarding, which you know, it’s hyper tactical, but I read it. I got maybe halfway through the book. And I was like, This is so great. I just emailed him immediately and was like, Hey, man, can I hire you? Like I need you to do this for us? This is freaking phenomenal. Anyway, he’s working with us right now. So that’s if you’re looking for for one of those, oh, this is how much I like that book. I have two copies looking at it. brand new John shell. That is me. No I. Yeah. Huge fan of that book.

 

Scott D Clary  1:20:07

Amazing. And then last question, what does success mean to you?

 

Rand Fishkin 1:20:13

It’s so different than what it used to mean. So so different. Success to me means that I make the world kinder and more equitable. Every day, at least a little bit. Amazing. That’s all I got, man. That’s it. Love it.

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