Rand Fishkin’s Secrets to Successfully Launching a New Product

The Problem That Sparked SparkToro

Rand Fishkin: Yeah. So I had the same frustration, the same problem that SparkToro solves, and that was the inspiration for it. So back when I was at Moz, obviously Moz is SEO software. I’d help a lot of people with SEO, but I also would help a lot of startups and early stage companies and just companies of all kinds, as I’m sure you do with just marketing. How do I get my message in front of the right people? And if it wasn’t in the SEO toolbox, it was really hard for me to help them. So if you had a product or a service and there weren’t people searching for exactly what you did, trying to help them was very, very difficult. And so I was actually on the board of a company. This is where the SparkToro idea, kind of the catalyst for it came from. I was on the board of a company called Haikudec here in Seattle. And their constant challenge was just finding any marketing channel that would work, if they ever found one, if they found a way to get in front of the professional coaches and sort of real estate professional and life coaches and some religious users, teachers that use their product. It was sort of a simple version of PowerPoint. They did great. But the problem was finding those whatever it was, sources of influence. Right. A conference, an event, a podcast, a website, social account that would actually reach their audience. And so I remember talking to Adam, the CEO, and saying, gosh, yeah, I feel like what we really want to do is cyber stalk at scale. Right? Just steal a bunch of your customers phones, log into all their phones and look at all their accounts and see what do they follow, what do they share, what do they link to, what are they reading, what are they subscribed to. And that’s where the idea for SparkToro came because I realized with Casey, oh, wait a minute, a lot of this data is public on the web and you can crawl it, it’s a pain in the ass, but you can get it. And that’s where the idea came from.

Louis: And what’s interesting here is that you’ve avoided so far anyway to say the I word, the influencer word. You haven’t mentioned it once. You said like, you know, so why is that? And then I will come back to the story because there is more into that.

Rand Fishkin: Yeah. So it’s not that, you know, classic influencer market or. Now what’s called influencer marketing isn’t effective. It is a marketing channel for some, you know, primarily consumer product companies. But it’s not something I’m passionate about or particularly interested in. Right. When I think of sources of influence, I think of all the sources of influence, right? A podcast, a YouTube channel, a website, a publication, an event, a social account that is not on Instagram. And influencer marketing means like hey, half naked people, $500 to pose with your product on mostly Instagram and a little bit now a little bit Twitch and YouTube. And that’s not something that we really wanted to help with. So actually SparkToro is very anti Instagram leaning in its initial version, intentionally so because we did not want to be associated with influencer marketing tools and because very frankly, if that’s what you want, we cannot help you.

Louis: That’s funny because we never really talked about it together. But from the positioning of the tool and from the way you just explained it in the last few minutes, I could sense that that was the point of view you had. If I may, as a small like suggestion maybe is to actually go for that as a, as a stronger even positioning and copy. That might alienate some people, but that might also make some people say shit. This is exactly what I think as well, because that’s what I think. So just a small suggestion, you know, that’s for free. Let’s just have a.

Rand Fishkin: We are not this big red circle with an X through it.

Louis: We are not like half naked. It’s not about finding half naked woman, it’s about finding.

Rand Fishkin: And men. Men are also doing quite well with the half nakedness on Instagram these days? Not me. I am not doing well with that.

Louis: Let’s see. All right, so going back to the story, so you had this. You were part of the board of this startup, and they had this problem, right? And it kept coming up and coming up. Surely that wasn’t good enough validation for you to start thinking, I’m going to leave Moz and start this startup? And by the way, was that the thinking? Was it, I’m going to try to find a product so I can launch something else before I decide to leave Moz? Or was it more, I’m going to leave Moz and then I’m going to find something else?

Rand Fishkin: I mean, I sort of knew that my. It’s a hard thing to describe, right? I sort of. I described it in a blog post as, zero is security, escorts you out of the building, and 10 is, you know, hugs and handshakes and everybody’s great friends. And I was a four in my departure, so a little bit difficult to describe, but I knew that I would be leaving Moz partially of my own accord, partially not. And I wanted to have something to do right away, like Louis. I knew, for example, that the day I left Moz, a lot of people would pay attention. They’d sort of be like, oh, Rand is no longer at Moz. Because I’d been there 17 years, there’s a lot of association built up, and I wanted to capture and channel that attention. I didn’t want it to be a negative thing. I wanted it to be a positive thing. So instead of, oh, poor Rand, I wonder what he’s up to next, and maybe I’ll reach out to him for a job or whatever I wanted it to be. Let’s take that attention and channel it into the next thing that I’m doing. So I wanted to have that next thing already set up. So, yeah, I spent a lot of time talking to marketers and agencies and founders, a lot of startup founders, and realized that this problem is near universal. And it was getting worse and worse because more and more people were interested in how do I do marketing without just throwing dollars at Facebook and Google. And at the same time, I’ve been writing about these trends a lot. Facebook and Google, across all their platforms, have made organic content less and less visible. You have this frustrating world where the platforms have sort of used their monopolies to dominate attention and to force businesses who want to get in front of people’s eyeballs to pay them money. I mean, Facebook’s a perfect example of this. Facebook’s average Engagement rate or average visibility per post was, you remember like five, six years ago, it was like 4%, 3%. Today it’s 0.09%. One in 1,000 people will barely see a post that you put on the average company Facebook page. It’s just awful. And so, yeah, people need other ways of getting at this data. Right. Ways to end around that duopoly. And that’s what inspired me to go after this. The weird thing is, Louis, Casey and I didn’t know if it would work. We did not know whether if you crawl all this data and then you put it together, will you be able to get enough quality profiles and will the data that, that the overlap shows, will that be good enough? Will it be interesting? Will it be useful? It wasn’t until probably January of 2019, when we had a tiny alpha version that we were like, oh my God, it works, kind of.

Louis: So let’s think back of the timeline. And I don’t want you to put you in trouble with your past employer and all of that. So there might be details you can’t share. But surely you started talking to people about that problem before you left Moz, right?

Customer Research and Validation Process

Rand Fishkin: Yeah, yeah, absolutely. And I had a conversation with the CEO at Moz. Right, okay. So she knew. Yeah, she knew. Like, okay. Because, you know, once we had the conversation about, you know, when, when do we want to have you leave, then it became a.

Louis: Okay. Yeah. So if you had to explain to someone listening right now how you actually conducting, like, conducted those, I wouldn’t call them necessarily interviews. I mean, it’s up to you to describe them the way you want to or convers, what would you tell them? And again, this is why it’s interesting because whether you’re around Fishkin or someone who doesn’t have a single follower, I think those principles apply. Right. So how did you approach that to discover whether there was a problem or whether there was just one company that said, actually we struggle with that problem?

Rand Fishkin: Yeah. So, Louis, my strong recommendation to anyone else is actually to follow this model. And I’m. I’m glad to say that I actually followed my own advice in this case, which was essentially built up some expertise around an area. I’ve been doing web marketing, obviously for a long time. I started doing more and more brand marketing, outreach marketing, creative forms of marketing that were not just SEO, especially my last few years at the company at Moz, and then took that expertise to build my network around this field. Talk to lots of marketers who did market research and that outreach and brand marketing and social media marketing and content marketing, and then use that network to conduct mostly informal but a lot of interviews, right. So literally sitting down with people at conferences and events, going to their agency offices and talking to them and their teams about how they did this work, getting on the phone with people, getting on video calls, lots of emails back and forth. Sometimes just informal Twitter DMs and LinkedIn DMs. But it was just a lot of like, hey, how are you doing this? I’m thinking about this problem. And from that I sort of built an actual survey, right? So from the interviews, the one on one interviews, I took all that, put together a survey which we ran in, I think it was the start of 2018. So just before I left, Moz ran that survey to maybe 700 or 800 folks in the marketing world, maybe even more than that, might have been a thousand, and essentially ask them how they solve this problem. When you need to find what your customers pay attention to and where you can reach your audience, that isn’t just throw money at Google and Facebook. How do you go about doing that? And how big of a problem is that for you and what do you do it for? And that survey data came back pretty looking, really good looking. Like this was a serious problem that many marketers had that they spent a ton of time or money on. And that’s what excited us about the problem. And so then when I launched kind of the company, the next few months were assembling more data, doing more of those interviews, and then that’s how we did our fundraising, which closed in June.

Louis: Okay, so let’s go back to the first step where I think to follow your recipe, some people would say, oh yeah, like Rand has been at it for like almost 20 years. He has a huge network, it’s easy to reach out to people. But I guess that’s part of the recipe. I mean, you’ve worked your ass off for years and years and years to build a really, really, really big following. So I would say step zero of this recipe is you’re going to have to have an audience who trusts you somehow, even if it’s a small one, so that you can reach out to them for those type of interviews if you don’t.

Rand Fishkin: And I didn’t use my SEO network, right? Like obviously there’s some crossover, but I had to, I have a non compete with Moz, right. So I couldn’t build SEO software, I had to build something else.

Louis: Yep, that’s. No, that’s a good point as well. So. And you Just naturally reached people. And at this stage you already kind of had an idea of the problem we were you were talking about. So instead of asking questions such as what are the biggest problems you suffer from in your job or whatever, you kind of boil it down already to this problem. What do you think of this problem or how do you solve it? Show me how you do it right now. Because from user research, I know that sometimes folks would start with even the step before, which is tell us the biggest problem you suffer from and then we’ll build something on top of that. But you already had the problem.

Rand Fishkin: Yeah. And part of that is personal interest. Right. I had a problem that I had struggled to solve and I was interested in. And then I just wanted to validate essentially whether lots of other people have this problem and whether enough people have this problem and it’s painful enough that people are willing to pay to solve it, assuming we could build a good solution.

Louis: So what were the. Would you say the top three questions that were so helpful to you when you talk to people? And then when you did the survey, you mentioned a few, but I’m just interested in the specific questions that you got the most value.

The Three Critical Questions That Shaped the Product

Rand Fishkin: Yeah, the biggest one was definitely, how often do you have this problem and how do you solve it today? Then what do you do once you have it solved? How do you take that data and turn it into actionable things that you do with your marketing in your business? From those three, we were basically able to intuit that solving the data side was more important in the short term than solving the take the data and go tactically run with it. There was enough people who had just the problem of how do I get this information? And then the diversity of answers on the what do I do with this data? Was so broad that we felt like, okay, software is not the right solution to, okay, now I have a list of podcasts and websites and social accounts to go after. What do I do with it next? That those answers were so broad that we were like, nope, that’s not what we’re going to solve. We’re going to solve the take this problem from a lot of companies. We talked to bigger companies, we talked to bigger agencies, they were paying 2550, $100,000 to run large scale audience surveys of thousands of people to try and get at this type of answer, which is ludicrous. Just crazy because self reported data is crap anyway. Right? If I ask you, hey, tell me 500 people you follow on social, what are you going to do? Oh, okay, here you go.

Louis: But that’s the typical example of, yeah, don’t ask people what they think or what they can remember and see how they actually behave. Which is what SparkToro does, which is following what people actually do, the accounts they follow what they’re talking about. It’s very easy in surveys to make you feel good and makes you feel smart and say, oh, I read E consultancy reports every month when in fact you’re actually on Instagram looking at half naked women or men or whatever.

Rand Fishkin: Right, right, yeah, yeah. And obviously what we want to try and do is not look at. And this was part of the complexity of the software itself, not look at sort of accounts that are broadly popular. So for example, on Twitter and on Facebook, almost everyone follows some big political accounts in the U.S. barack Obama, Donald Trump. So what? Not useful. What you have to do is instead say, oh, people who describe themselves whose job title includes interior designer, what do they uniquely follow that other people don’t? So we sort of take the, here’s what everyone follows. Subtract that out of what interior designers follow. Now we can see what interior designers follow that’s unique to that group.

Louis: So those questions, how do you solve the problem right now? Walk us through it. That sounds like the very important question for you. And it sounds like you got the perfect answer, which is, we suffer from this problem quite badly, we pay a shit ton of money to solve it, and the solution we are paying for is inadequate, very labor intensive, inaccurate, et cetera.

Rand Fishkin: Right, Yeah. I mean, for a lot of people, I will say the two frustrating answers that we got back that sort of led us to be. To feel like this was going to be a challenge was one, a lot of people did not even try to solve the problem. Right. So a lot of people told us, like, I have this problem, I just ignore it. I just don’t do that work because I don’t know how to go about solving it. So we were like, okay, this is going to be a huge education hurdle. We’re going to have to teach people how to solve the problem. We’re going to have to inform them that they have the problem. And then the second frustrating one, which is just a linguistics problem, at least in English, people said, I have this problem, but I have no word or phrase to describe it. No one said, oh yes, you’re talking about sources of influence, discovery. They don’t have a word for it. Seven years ago, 10 years ago, sort of pre Instagram people would have called it influencer marketing. But then influencer marketing came to mean the Half naked people on Instagram thing. And so now this problem doesn’t have a word or phrase. So we’ve been using audience intelligence, but that’s our own sort of creation.

Louis: And how far along in the timeline did you actually decide on this name?

Rand Fishkin: I would say that was pretty darn early on. It was basically a. Let’s choose a name for this where people say audience intelligence. That sounds like something I should need and I want to learn about, but I don’t know what it is.

Louis: And so you send this survey out to 800 people that further confirmed the fact that there was those two type of people, as you mentioned, like the problem that they were trying to solve already or the problem that they had, but they didn’t even try to solve. And so then what happened? What did you do? How did you. So you had to take the leap, right? Yeah. Was it the time you left Moz?

Leaving Moz and Launching SparkToro

Rand Fishkin: Yeah. So then it was a. Okay, we like this problem. We think there’s some opportunity here. You know, I leave Moz and I start the SparkToro site. Basically, I gave myself almost 12 hours off and started SparkToro the day after I left Moz. So the first blog post, the blog post that I sent out to everyone in my network was my last day at Moz, my first day at SparkToro. And that attracted a lot of attention, which was great. And then got people knowing, okay, Rand’s not at Moz anymore, and he’s got this new company. And then the next three months were essentially pitching investors. I wanted to make some progress raising some money before Casey left his job. He was still working at Ookla at the time. And this is my co founder, right? And Casey’s the technical guy. Like, he did all the software building. So, you know, huge, huge amount of reliance on him. I was very lucky in that I still had my severance pay from Moz, and I had a. You know, I had a nice severance pay. Basically, I got a year of severance, which is very generous. But, you know, a lot of people think, oh, well, Moz is like a 55, 60 million dollars a year company, and Rand owns 20% of it, so he must be rich. Sorry. Until or unless Moz sells, you know, our net worth is very, very small. Don’t believe what you know. If you start Googling Rand Fishkin, the first thing that comes up is net worth. And all of those. All of those sites are wrong. They’re just terribly wrong.

Louis: You talked about it in your book, didn’t you? I think you mentioned Your salary or like you give an idea of. It’s not what you think. So thanks for being transparent with us and with me on this. I think that’s why people follow you and like you so much. So you left Mars and literally the day after you piggyback in a sense of this big news because you knew that people would follow that and you had at this stage a rough landing page, if I’m remembering, or like a rough website and.

Rand Fishkin: Yeah, and then email.

Louis: Yeah, there you go. So you chose. Why did you choose to do that? Why did you feel like that was the right next step for you? So you. Sorry, I’m asking a lot of questions, but I’m curious about it, so let me just try to recap a bit. So you left Mars and you said. I reached out to, to my network about this blog post I just wrote. How did you reach out? Did you. Do you have a newsletter or did you literally reach out one by one to your.

Rand Fishkin: I cheated a little bit. I took all my contacts. I had about, I think I had 8 or 9,000 and I used Gmail’s, you know, 500 per day BCC to over the next four or five days send it out to all my old school.

Louis: So you did it really old school. You didn’t use really old school mail merge or. Okay, and how did you. Obviously when we say those 8,000, 9,000 people, those are, I would say your people, right, People who you’ve met or you have strong relationship with or your answer feels like not so much. No, not all of them.

Rand Fishkin: I would say probably somewhere between a thousand and two thousand of them. I have some relationship with some, you know, in person relationship with. We’ve met at a conference or event or we’ve chatted online or that kind of thing. And then probably another, you know, the other five or six thousand, whatever that group is more. They’ve emailed me about some problem they’ve had in marketing world. Right. We’ve had some contact, but it’s probably primarily digital. Maybe they, you know, reach out about some blog post I wrote over the last whatever, 15 years or whatnot. So yeah, there were a lot of bounces in there. So I was able to cull that list down to. So I sent them all in six days. So it must have culled down to only 3000ish emails. Basically once I exported the contacts, merged them throughout the ones that no longer resolved.

Louis: It’s funny because I would have thought you had way, way more based on all the work you’ve been doing and whatever. But 3,000 emails?

Rand Fishkin: Well, sure, I mean, so what I could rely on was those contacts were like the closest, most well connected folks. And so by emailing them, it worked out great. And then even just sending a tweet, putting up a post on LinkedIn and putting up a post on Facebook, it reached thousands more people. I think the blog post had something close to 70,000 visits in the first week. A lot of people knew about it. I mean, not a lot in terms of I’m not an influencer on Instagram who has a million followers who know about every swimsuit I put on, but in the marketing world, good enough.

Louis: Okay, but that feels, I suspect that for people listening to you right now, it doesn’t feel like this is a crazy number that they’ll never be able to do and that they have to put 20 years to actually build a massive lease. So it’s quite, it’s actually quite humbling to hear you say that. And then I remember because I remember vividly, it’s like, I’m not going to say it, but like, you know, those, those world events where you remember where you were. I’m not going to say I remember where I was when Fishkin left mos what I want to say, but I do remember, I do remember when, when I read the blog post because every, a lot of my colleagues sent send it to me and say, oh shit, did you see this? And yeah, so I do remember this blog post. So what happened to this? So you said 70,000 visits in the first week and you started collecting a lot of emails then. Right, so what happened next? What did you do next? What were your next step?

Building an Audience Through Enemy-Focused Content

Rand Fishkin: Yeah, so as we were raising money, we were also building this email list. And over the next essentially 18 months, I did one thing and Casey did another. So 90% of Casey’s day was essentially building the product, validating that the technology could work, figuring out how to crawl all these social networks and websites and connect up the profiles. Meanwhile, I was essentially on the road and on the blog trying to build up an audience for SparkToro. My goal was let’s get marketers and people who would be interested in solving this problem over to SparkToro. And one of the ways that I did that was very, I almost want to say roundabout. Right? So a lot of the big content pieces that I put out and research that I did was about the problem of Google and Facebook’s duopoly in advertising and marketing world and how they were sort of infringing on the ability of marketers to reach their audiences. And so the biggest blog post I think that I wrote was half of Google searches now don’t result in a click. Right. That made its way hugely around not just the web marketing world, but all sorts of different worlds that got cited by Congress. And when Google was testifying before Congress, it got a bunch of news stories around it. So those kinds of things where I’m essentially doing research and publishing research that is helping people understand that this problem exists and that they have to start thinking of other ways to reach their audiences, that was really my goal. It is self serving, but in a way that is also, I hope, very helpful to marketers. Right. Like legitimately helpful, even if you never have anything to do with our product. And yeah. So over the course of those 18 months, we attracted about 20,000 people who signed up for our email list. And then when we got to the beta period, I essentially went through. So of those 20,000 about, I think about 4,000 filled out an additional survey. Right. So once you signed up for the email and we confirmed it, we then sent you a survey that said like, hey, take this if you want to sort of jump the line. And the survey was probably a 10 minute survey or so, asked a bunch of questions about your job, enroll. And I went through that list manually for our beta and looked for people who sort of, you know, a diverse group of people who match. Some people who are agency, some who are independent consultants, some who are in house brand managers and marketers, some who are founders. And then we sort of took those four groups, emailed them and said, hey, do you want to be part of the beta? You know, here’s your invitation to the beta. And we did three, threeish groups of about 300, 400 people each in the fall of last year. And then those folks kind of helped us test the tool and get us to the launch this spring.

Louis: There’s a lot to unpack here. The first thing is you’ve picked an enemy very early on.

Rand Fishkin: Yes, exactly. An enemy I really recommend, I can’t recommend enough that startups have an enemy. It could even be old way of doing things. It doesn’t have to be like human beings, organization, but just an enemy.

Louis: Yeah, and that’s. I can see how fired up you are about this. This is what happens, right? Passion arise. Like this is, I mean, not talking about the US politics too much. This is what happens when you pick a fucking enemy. Right, exactly. So you’ve done that very consciously. Sorry. In a sense. And then you kind of reverted as well to what you do best, which is like this long form content, very thoughtful, very research based data for 18 months. I mean, 18 months. And what strikes me the most about your approach, all the way to the actual manual, very organic email you sent me a few weeks ago when I actually purchased Pactoro as part of my job, is that you’ve been doing things very organically, very naturally. Like those bcc, those, those looking through your beta list manually, those like everything seems very like organic. And I’d like to take a minute here to think about that and if you’re listening to this podcast episode right now, to think about that and compare that to the approach that a lot of people are taking right now about scraping the shit about LinkedIn and auto emailing you with fucking lead generation funnels and spamming the shit out of you. There is another way, and I’m picking an enemy here voluntarily. I am fighting against those growth hackers who have no consideration for the people in their list or the people they are reaching out to. Compare that to what you’ve done and I think it’s admirable to see that you keep this philosophy and it’s very effective, clearly. So that was a small apartheid, but I want to go back to something you said because I’m pretty sure some people would find it very interesting. You said you raised capital for this, right?

Rand Fishkin: Yeah.

Louis: You raise capital with zero customers, paying customers, correct?

Raising Capital the Organic Way

Rand Fishkin: That’s right, yeah. Very much a seed round, speculative.

Louis: How did you do it? So what was the approach? You used all the surveys you had sent to build the deck and to reach out to your connections. How did you approach it?

Rand Fishkin: Yeah, yeah. So this is one of the things that we’ve been very transparent about. If you search for SparkToro funding, you’ll find our funding documents. You can find the Google Doc that I essentially used to pitch and raise money. But the process was very, like you pointed out, very organic and very simple. I essentially reached out to people from my network, many of whom, in fact, I think half of our investors had not invested in a company before. So they were not investors, they’re just people in our network who basically a lot of agency owners, content marketing agencies and marketing agencies, branding agencies, those types of folks. People who I had met through the SEO software entrepreneurship world, people I had met through the Seattle tech scene and locally, I think about 25% of our investors are local to the Seattle area. It was 36 angel investors. And we, you know, essentially said, hey, we’re going to raise money in this unique way. It’s an LLC where we distribute profits, et cetera, et cetera. And I emailed folks and basically said, hey, you know, you might not know, but, you know, I left Moz. I’m doing this new thing. I’m going to raise money for it. We’re going to use this unique structure. Would you be interested in chatting? Is that something you want to chat about? And I will tell you, Louis, I had. I felt so nervous, and you can imagine.

Louis: Yeah. Embarrassed for money. Yeah, I understand that. I understand that.

Rand Fishkin: I don’t know. I’ve talked to a lot of entrepreneurs who. They’re very shameless, right? And I wish I had that quality. I don’t have that quality. But, yeah, there were a few people who I didn’t email because I felt too embarrassed. And I’m thinking of one in particular who was really pissed at me afterward. He’s like, why didn’t you email me? I wanted to invest. I wish I’d been a little more shameless.

Louis: Okay. I would have sold my house and everything. I’m only joking. Obviously, I don’t have a house. So what was the answer then? Because, okay, I can see that you’re preparing those emails and before pressing send, you know, felt weird about it. It’s very odd to ask for money like that and whatever. What was the answer? What happened?

Rand Fishkin: So we had a very high success rate. I think I tried to estimate it. It was somewhere between 75% and 80% of the people I reached out to said yes. Right. So part of that is because I have good targeting, right? So I knew, hey, here’s good example is Ian Lurie, who, you know, personal friend, someone who I’ve admired and looked up to for a long time, right. He had been in the. In the web marketing field and he sold his agency, I think, the year before. We raised money for Sparktura. So I was kind of like, okay, Ian, good bet, right? Good bet here. I’m going to reach out to him. Lisa Myers, right? She sold her agency to Omnicom. It’s like, great, I’m going to reach out to her. I had some friends who had sold Urban Spoon a few years before, and I had helped them with SEO early on. I was like, those guys, they’re great. I played Dungeons and Dragons with them. So I was like, okay, they’re going to invest because they owe me. I had people in my network who basically, the founders, or, sorry, the CEOs of Zillow and Redfin, which are both Seattle based companies. They both invest despite being competitors, which it’s kind of Kind of awesome. Right? And so that was, that was really great. I, yeah, we had, we had a few people in our network through SEOworld, you know, that they came in and was, it was a, it was a good process. There were even a few people who had reached out to me after I wrote that blog post, which I, you know, I didn’t know this was going to happen, but I kind of hoped it where people reached out and said, hey, what are you going to do next? I’d really love to be involved. Right. And so that works out. I think one of the challenges is the advice for a lot of early entrepreneurs, right. And folks who are new to the field is unfortunately, spend time building your expertise in your network and this process becomes way easier. And that is not nearly as compelling a tactical bit of advice as, wait, what’s the secret to getting in front of investors?

Louis: Yep. The secret is to scrape LinkedIn for everyone who has investor in the job title and reach out to them for seven days straight. But again, I think this is important to remember and you have this mindset and you have this philosophy, like, naturally, you’ve been doing that for so long, it’s just embedded in your DNA almost, but it needs to be repeated out loud. This approach really goes against what a lot of people and marketers and others are doing right now, which I truly believe is the wrong approach. This short term tactic, like building a brand, like building relationship, it just takes time. And exactly as you said, the success rate of your seed round is like 75, 80%. That’s because you have a brand and a trust attached to you because you’ve been giving and giving and giving to your audience for so long that it’s just naturally that they choose to give back. People who expect to take, take, take, you know, before giving anything away, this is what happens. You will never really get anywhere close to 75% or 80%. You will probably never get anywhere close above 0% at this stage. But I think this is the, In French they say the filter rouge. Like the, I don’t remember the English fucking. Which is the red. The thread. This is the thread of this conversation and this is the thread of your work, which I admire for that. So then, so going back to the timeline, you raise the seed round and by the way, like, do you have. Actually, I didn’t ask you this. Do you have. Are you just the two of you still working on SparkToro full time?

Rand Fishkin: Yeah, yeah, that’s right. So we intentionally, we knew we wanted to give ourselves a lot of Runway and we wanted to have a very, very low cost structure so that, you know, because we didn’t know, we didn’t know whether this was going to be. Are we going to come out of the gate and struggle to get to 5K MRR and then 10 and then 15 or are we going to come out of the gate and it’s going to be 20k in month one? Who knows? Because we didn’t know. We wanted to be very cautious around that. I didn’t take a salary the first year because I had my ma’s salary. And then Casey left his job after we got funding or maybe right about when we got funding, then we kept it, just the two of us. We used some consultants and contractors on UX UI, some SaaS consultants to help us. Company called Elevate, which helped us with analyzing all of our feedback data from the beta and determining when to launch and what other things we needed to do before we were ready for that launch. That’s actually what predicated us or what inspired us to do the redesign over December. And I think that worked out really, really well. We leaned on other people but we did not do full time hiring. And as a result Casey and I were looking at it. We’re sort of like, okay, we are whatever, three, I guess two months in basically. And we are more than halfway to profitability with, you know, with our existing relatively small customer base, 150ish customers.

Current Numbers and Pandemic Impact

Louis: So we are recording this at the end of May 2020. Can you share the. If you’re not comfortable with it, that’s cool. But what’s your rough MRI right now?

Rand Fishkin: Yeah, yeah I can. So we use this tool called profitwell which is very, very great. I like a lot. Highly recommend. MRR overview says we are at 21,239

Louis: pretty nice monthly recurring revenue, which is like revenue obviously not profit. And you say you are halfway through profitability, meaning that you’ll be profitable once you have 40,000. Mr. That’s exactly right, yeah. And 150 customers. So that’s like, I’m not going to do the math properly but it’s like what, what’s the advice?

Rand Fishkin: Yeah, customers. Oh, so sorry. Oh, average revenue per user.

Louis: Yeah, average revenue per user.

Rand Fishkin: It’s right around, yeah, it’s right around 150. 170.

Louis: Nice. Yeah. So yeah, very, very strong numbers. And if you keep growing at that rate. Yeah, you should reach profitability with a two person team, a seed round and what, 17 years and more of work in the back of that. That’s pretty nice. Are you happy? Are you grateful? Do you feel.

Rand Fishkin: I mean, I think.

Louis: Are you not embarrassed anymore?

Rand Fishkin: I think I am. I’m extremely grateful for so many people’s support through this process and grateful that we built the business the way we did. I think the one thing that is very frustrating, obviously, is our launch. Timing just sucks, man. I’ll tell you. So, Louis, I have these early access emails. At the end of February, we start sending our early access emails to the 20,000 people who signed up. And we’re basically going through that list. Every week or Two, we’re sending 2,3000 of those. And as the pandemic is getting worse and the economic situation in the United States and in Europe and all these places is falling off a cliff, more and more of the emails that I send are coming back with so and so no longer works here.

Louis: Right.

Rand Fishkin: So I’m just seeing like this carnage in the marketing world, just destruction of so many jobs coming back to my inbox every time we’re sending those emails. That’s heartbreaking. Just heartbreaking. And then, of course, we’re talking to a lot of people who had been early customers or beta customers or whatever, and they’re like, yeah, I wish I could sign up, but finance pulled my credit card. I’m not allowed to do any new spending until 2021. We’re cutting all of our costs. We no longer. Our customers are gone. Brutal. Just brutal. The US economic picture is down 25, 30%. Just GDP evaporated. And the outlook for the next six months is pretty brutal. And it could be much longer than that. I think most economists are looking at 24, 36 months recovery minimum. We’re lucky in that we’re doing well. Despite that, we’re able to find customers. But our customers, I mean, if you look at our customers, they’re kind of the people who are doing okay through the pandemic, people who are still growing. Right? A lot of. We’ve actually had a surprising number of consumer products on the, like, toys and games and entertainment side, which makes sense, right? Cause there’s a lot of demand for that. Had folks on food and grocery recipes. That kind of stuff makes total sense. We’ve had almost no one from travel and hospitality. We’ve had a lot of people from healthcare and medicine. So you get the sense of like, aha, these are the few industries that still have growth and opportunity. And so of course there’s folks looking for them. If it was six months ago, you know, Sparktoro would probably be much more popular. And you can see that in the data. The February, the end of February signup rate to paid was 5%. It’s now about 0.5%. Right. And there’s nothing changed. It’s just the economic situation changed.

Louis: Yeah. I’m glad you’re sharing this as well. I mean, in total transparency, as always. Yeah. Because you’ve really launched that. I don’t think you could launch at a worse time. But I guess that’s what it takes. I guess this is the reality of it. And you’ve built. I’m going to forget the word again. I’m very good today. But you’ve built this kind of strength, like mental strength over the years to be able to protect yourself mentally at least against that. And I guess you sharing this story is also a way to do that. I’m sure that people listening to this podcast will reach out, will check out your tool, and some of them hopefully will start paying you as well so you can become profitable. I’m conscious of the time. We have one minute left. But yeah, I want you to thank you again for, for this candid conversation and sharing all of that. I hope, my personal hope is that people will understand that there is another way than just doing it automated way and expecting that in two weeks time you’ll have built an audience and trust to get the result you got. And the last thing I wanted to say is that actually the first interview I’ve done post Shit Covid is happening. So I’ve stopped doing for two months because I just literally couldn’t. And every topic I was getting from potential guests was how to do marketing in a crisis. How to do marketing in a crisis. And I didn’t want to cover that. Not because I didn’t want to help people, but I felt it was just too much. And instead I spent time talking to marketers 101 and trying to help them out, which I thought was a much better use of my time. I love that. Anyway, Rand, thanks so much for your time. SparkToro.com is the. Is the place to go read, to read your posts and check out the tool. You have 10 free searches, right, for any accounts. That’s right. I personally found a lot of value out of it already, so thank you.

Rand Fishkin: I’m thrilled to hear it.

Louis: Louis.

Rand Fishkin: Thank you so much for having me.

Louis: You’re very welcome. Foreign. And that’s it for another episode of Everyone Hates Marketers dot com. Thank you so much for listening. I’m super, super grateful. I’d love for you to consider subscribing to my daily newsletter Monday to Friday called Stand the Out Daily. I send very short, hopefully interesting, surprising, shocking, entertaining content to help you stand the fuck out. It’s at everyone hatesmarketers.com you can subscribe for free and obviously unsubscribe whenever you want. I’m just going to read a couple of emails that I got recently as a reply, Zuma said, your content attacks the mind primarily, which is such a good thing because most of us are skilled at what we do, but we don’t have the courage to do it our way. Mark, who just subscribed couple days before, said, this is my first issue of your newsletter. Love it. Glad I subscribed. Brianna Said, I just realized this morning that my email habit is now two 1. Skim through the list. 2. Select all unread industry email except yours. 3. Delete and don’t think twice. 4. Quickly scheme yours. Amy said, Also loving the new content is coming from you. It feels really lovely. Kendall said, I like your writing a lot. It really resonate. There’s so much bullshit out there. It’s good to touch the authentic. And Chloe said, where is the I love this email button? Brilliant. I hope you subscribe. You’ll be joining more than 14,000 subscribers at this stage, which is crazy. It’s the size of a small stadium. Anyway, thank you so much. See you on the other side.