Built a $50M/yr SaaS Biz (that didn't work out so great), So I'm Building Another One. I'm Rand Fishkin of SparkToro (prev. Moz) AMA

In 2001, I dropped out of college to build websites with my mom at a tiny consultancy in Seattle. We went deep into debt, created a popular blog in the SEO world (SEOmoz, which became Moz), dug ourselves out, and then accidentally created a software company.

Over the next 7 years, as CEO, I grew Moz from $0-$40M in recurring revenue. During that time, I raised a couple rounds of venture funding (after failing to raise for many years), then, in 2014, stepped down from the CEO role during a bout with depression. In the following years, I’ve become a vocal critic of the VC model and asset class, and a strong proponent of indie-funded, crowdfunded, and bootstrapped businesses.

My new company, SparkToro, has a very unique funding model (we raised $1.3M from ~35 angel investors into an LLC that pays dividends from profit), and a completely different approach to scaling up. I’d love to chat about/help with:

  • Starting a SaaS business and why I think VC is a bad influence on & bad decision for most of us
  • Alternative forms of funding and structuring companies
  • Why it’s better to be great than big (and how startup/tech media biases us to make the wrong call here)
  • SaaS Marketing, especially organic channels like content, social, SEO, and email
  • Why you should bring your emotions, values, politics, and whole self to work
  • Diversity in startups and SaaS, particularly the lack of women and PoC founders, and what we can do to help fix that (plus why it’s so important)
  • Audience research and why understanding how your potential customers (and their sources of influence) behave is so critical to product + marketing strategy
  • Pasta recipes, single malt whiskies, ethics, TV shows, & the upcoming nightmare of an election in the US are all topics of personal interest/passion, too

I’ll be back on October 29th at 10:00 AM PT to answer questions. Would love to hear from y’all!

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Note: This AMA is closed for new questions, but you can check out the existing conversations below.

In this AMA, we had Rand Fishkin — the co-founder and CEO of SparkToro and (prev.) Moz — share his thoughtful insights on marketing a product right, the beauty of the early days of hustle, and what he is doing differently at his second venture. Dive in!

Rand’s brain pickings: :brain:

Here are some highlights to help you understand Rand’s thought process:

On why product-market fit is a broken concept:

Founders and product builders ignore many of the real inputs that go into gaining market traction, selling their product, or earning users, especially pricing, positioning, and brand. It’s often the case that investments in these tactics—modifying price points, positioning your product’s solution differently or to a different market, and/or earning more brand recognition, likability, and trust—will have huge impacts on growth. But magical belief in a “product-market fit inflection point” shifts all the weight onto the product itself, and limits creative ideas around what might solve the company’s issues.

The real question should be: is there any value in thinking about product-market fit as a true or false statement? Does the startup world glean greater survival rates or make better products or prioritize their team’s time better by thinking about this problem as a binary? Should we listen to firms like Andreesen Horowitz (1) or startup marketers like Brian Tod (2) or influential investment partners (3) simply because they’ve watched, advised, or invested in lots of companies who’ve failed at this (and a few who haven’t)?

To me, it’s a clear no. I cannot see a benefit or value-add to product development, gathering of customer feedback, marketing, or any aspect of the company’s strategy or its tactics. The only way fit-vs.-no-fit is helpful is in its simplicity. And by now, I should know better… We should know better than to trust simple > complex when it comes to building and marketing things to people.

Source: Product-Market Fit is a Broken Concept. There’s a Better Way.

On the two biggest things Rand wishes he’d learned earlier as a leader:

I think one of the biggest things that I failed to understand, it’s two things. I think one of them is the economic and power structure that comes with financing of different kinds for a business. Initially, I raised some debt with Moz and then, some venture capital and then a whole lot more venture capital and I could carry it for some extraordinary, truly wonderful people, some of the best people in that field. I don’t think I have a good understanding of just how that structure works and who it’s empowering, and who is helping, and how they contribute to the world.

I think the second thing is and I think this is probably true for a lot of people who like me, started a business in their early 20s, which is that I don’t think I had a strong understanding — a solid understanding — of myself and what I love and what I like to do and how I want to contribute to the world and how I really didn’t. The mash up of those two things created a lot of the strife and stress and when those things were most aligned or when I was most ignorant of them and paying no attention to them — things went very well. That’s a challenge I think that a lot of founders, especially over the last 20 years or so, as venture capital has been put forward as not just the best, but almost the only way to build a company in the tech world. Either you are raising or you want to raise or you’re trying to do something that you think will interest investors so that you can raise and the number of companies and entrepreneurs who think, “I like to do this in a different way. I want to raise money in this other way. I’d like to think about alternatives,” is infinitesimally small and that’s frustrating.

Source: Know Your Team’s Interview with Rand Fiskin

On founders’ baggage:

The conventional wisdom that you should bolster your weaknesses with great hires who can give you that strength isn’t totally wrong, but every time this advice is passed on, it should contain these three caveats:

  1. Lacking deep knowledge and understanding of an area means that you are less likely to have connections in that field, less likely to identify right versus wrong hires in that field, and less likely to successfully recruit and convince great talent to join. You might not even “realize which knowledge you lack (unknown unknowns, amirite?).”
  2. A founder’s weaknesses are often baked into the company’s DNA and create a figurative kind of debt (nonideal practices or systems) that must be addressed before progress can be made. If you lack engineering skills, this often manifests as technical debt that must be remedied through re-architecting and rebuilding core systems before adding features or enabling scalability. If you lack people management skills, it’s likely organizational debt that requires months of digging into interpersonal and intra-team conflicts, letting go of some staff, rehiring, and creating processes for engagement and teamwork that build trust.
  3. When you rely on someone (or several someones) to bolster a weakness, their departure from the organization creates risk that the wound will reopen. This risk is greater in smaller and less-experienced teams where the senior leader is often the glue keeping things together with their presence, and lessens as organizations grow (so long as that leader has created consistent quality through redundancy of great people and great processes).

Source: (Rand’s insightful, deeply personal book) — Lost and Founder, Chapter 5: Startups Carry Their Founders’ Baggage

On the long-haul demands of doing content right:

I started blogging in 2003 about SEO. It wasn’t really until 2005 or 2006 – 100’s of blog posts in – that I started getting a feel for what resonated with the audience, what was actually useful, what made sense to publish (and not). If you go back, you can still see in the archives those early, early days of SEOMoz, you’ll see that those posts are not particularly great or useful, they’re not all that readable, the writing isn’t terrific, the topics and headlines aren’t great, but then it slowly, slowly, slowly gets better.

I think that’s a part of why so many content marketing campaigns fail is that a company says, “Okay. Now we’re going to invest in content marketing,” and expect that 6 months in they’re going to have ROI. Nope, that’s crazy! You know, I don’t expect to have ROI day 1 with any sort of inbound or organic marketing practice. Those are things that you build up slowly over a long period of time. You start to grow a brand, you start to get good at empathizing with your audience and figuring out what they want, publishing good stuff, getting better as a writer and publisher, getting better as a promoter of that content, building up a network that will help you grow out that content. It’s a flywheel, and it’s very hard to get it started, and once it gets turning, it’s relying on inertia to keep moving faster and faster.

Source: Startups.com’s Interview with Rand Fishkin

Stay in touch: :sunny:

You can follow Rand to stay updated with his discoveries and insights:

  1. Rand on Twitter
  2. Rand on LinkedIn
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Hey Rand,

Long-time follower here and really excited about the session! :slightly_smiling_face:

Among the earliest content efforts that I took up at Chargebee, was a video series modelled on the consistently insightful, Whiteboard Friday series. Although that was a short-run effort in itself, a lot of the research behind it and the maker’s confidence (isn’t that a thing? :)) bled into our blog and led to some much-needed early wins. So, thank you for that and all the thought-out education you’ve long facilitated!

This is a great segue for my question, too. You’ve always been at the forefront of digital marketing, so to speak. You’ve championed the new things at the edges and have seen them become the centre, time and again. With that heft of perspective, what, do you think, are some of the factors that can help early-stage founders determine how they should be portioning their attention and resources across demand generation and demand creation initiatives?

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Hey Rand,

Thanks for doing this!

So glad to have you here. :slightly_smiling_face:

I’d love to get a peek into what starting up again has been like and what all of us can learn from that. As a first-time founder, one is building the house room by room, floor by floor, not knowing what necessarily lies ahead. How different has the second outing rendered that experience? Did you go in with a floor plan and all the other macros of the house all set, this time around? Where has the clarity helped and where have you felt the unknowns remain still as glaring?

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Hi Rand,

I read your book - and was amazed at your grit and the story of rags to riches :slight_smile: In the case of the first company the content strategy & execution was a few years ahead of the product. How are you dealing with it this time around? What is your advice to someone at a 10-person company stage trying to figure out what to prioritize in terms of a content strategy:

  1. SEO
  2. Thought leadership content
  3. Content on other platforms e.g. LI/Quora etc.
    Other stuff e.g. video, podcasts etc.

The goal is short term and mid term growth both.

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Dear Rand

Firstly, amazed by the book and how honestly it was written. Moz has been a go-to-guide for content marketing & SaaS marketing in general. Things like “Beginner’s Guide to Content Marketing” etc. were the first pieces I read while building marketing practice at my SaaS startup.

My question is around Founder as a first time Marketer. I have been the first programmer & first sales person for my startup both practices now being led by others ably. 2Q back I have taken up role of leading marketing efforts -

  1. Any starting advise to building a marketing mindset for the founder & initial growth teams ?
  2. Good primer & advise on marketing stack e.g. we use MixPanel / HubSpot / GA for building a good tracker for MQLs & demand gen from start
  3. For Mid Market ( $10K - $50K ACV ) hunting any special advise on early marketing strategies ?
  4. What to look for in an early growth teams & qualities of a Product Marketer you will recommend ?

The goal is to build a marketing growth mindset in the company.

Look forward to hearing from you.
Cheers
Abhi

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Hi Rand,

Thanks for taking time out do this AMA. My question is:

How do you think about community marketing in relation to content marketing?

Do you think startups should focus on one those first? Or are different sorts of products or industries or businesses or founders more suited to community vs content?

Looking forward to hear your thoughts.

Neil

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Hi Rand I recently emailed you about product adoption struggles in the SEO world.

In the email, you said you never understood why one product succeeded while others didn’t.

And so, looking back to the past of Moz, is there anything you would have done differently today that might have helped with the product adoption by other SEOs?
Also do you believe that having great product/service (objectively, truly) is still not enough to succeed even at first stages of the launch?

And third question,
If you have a billion $ to invest in remaking a remastered version of an old video game, which one would it be.

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Dear Rand,

Thanks so much for doing this AMA with us. Its great to read about your journey, congratulations on your success! Your note on founders baggage resonates very strongly :slight_smile:

We, kriyadocs, are a document workflow solution focused on publishers. We have transitioned from a services company to a product company with services. Almost all of our current customers come from the services route and we are now trying to recruit self serve customers. I have a couple of questions I would like your perspective on

  1. How do we identify the watering holes that our prospect might visit? What are your thoughts on creating the watering hole ourselves?
  2. Our space is almost entirely serviced though the services route and we are trying to introduce the concept of self serve. What do you suggest that would help in creating this new category?

Thanks so much for your thoughts.
Best regards
Ravi

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Hi Rand,

Thanks for doing this. Big fan of your book and blogs (many of which shaped our approach to SEO at Klenty).

As the founder of a bootstrapped company, I fully resonate with your philosophy of being very thoughtful to raising the right amount or limited amount of capital at the right terms.

The question, however is: as a bootstrapped or lightly capitalised business, how do you compete in a crowded Saas market with other heavily funded competitors. What are the advantages that a David has against a Goliath in the Saas space ? And how does one exploit them - especially in the early days? Any tactical (or philosophical :slight_smile: ) thoughts would be great.

2nd question, Marketing for early stage saas businesses: what are some saas companies/ examples that you admire for their approach to marketing. Especially the ones that punch above their weight class - when it comes to mileage vs size of company. And why?

Look forward to your thoughts!

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Hey Rand,

Thanks for doing this AMA! :smiley:

At Locale.ai we are building a product in the geospatial space that makes spatial data accessible and interactive for businesses. Now, because how new and nascent the space is right now, we have come to realize that a big piece of the puzzle for us is awareness and education that then leads to customers.

Given you were in a similar space when you started Moz, do you have any suggestions or tips on what we should do and what we should avoid as we play the content and branding game? Especially when selling to orgs with limited risk and exploration appetite than startups.

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Thanks Krish! Very kind of you, and glad to hear WB Friday helped you find some content marketing success, too :-). In terms of factors for where early stage founders should start marketing, this post might be helpful: https://sparktoro.com/blog/where-should-you-start-marketing-a-new-business-or-product/

Basic story is that I’d suggest starting with tactics and channels at the intersection of these three things:

The other factors I’d consider are where you feel you can build a flywheel – a system in which you’re consistently investing and always improving (in efficiency of production, quality of the marketing you’re putting out, and the ROI you earn). For a lot of founders, content marketing through a blog is a solid place to start, but social media, ads, digital PR, community, SEO, events can all work, too.

At Moz, I started with a blog+SEO. 18 years later, with SparkToro, I started with mostly digital PR (aka “other people’s platforms” like podcasts, webinars, YouTube channels) and events.

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Dear Rand

What are the resources & books you would recommend for the following areas esp Company Culture :

  1. Team Culture & Values
  2. Aligning product, engineering & sales teams across company’s belief system.
  3. Making sure we identify cultural misfits & how a founder can constantly evangelise & learn about cultural inconsistencies & something other founders have done.

I believe marketing is just not extrinsic for revenue in general but also intrinsic to your company’s brand & attracting right kind of employees.

Happy to hear your thoughts, resources or few book recommendations for first time founders.

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Hi Rand - Been a follower from the days of SEOMoz.com. I am Vivek - Founder at iZooto. We are 4 founders and getting everyone on the same page is a real trick thing. What I loved about your the book and the recent post about your rapport with Sarah is the candidness. It takes a lot to be vulnerable and candid at the same time but this in my experience is a key building block. What can founders do ( or avoid ) to make build a culture that encourages individuals to be both candid and vulnerable.

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Great question Rajaraman! I wasn’t entirely sure how much my previous experience would help on the planning and structure sides of things, but honestly, it’s been much, much easier. I can definitely see why many investors want to back 2nd and 3rd time entrepreneurs, because when I compare this journey with SparkToro to my first few years trying to build Moz, it’s night and day. The path is not just clearer and more obvious, but also easier. I don’t have nearly as much of the rocky emotional ups and downs.

Casey and I certainly went into SparkToro with a lot of the “floor plan” set. We knew how we wanted to raise money, how we wanted to build, how to get our initial email marketing list together for launch, how to structure our workdays and balance that with our lives (well, at least until Covid). I have a lot less fear and uncertainty this time around.

All that said, the one thing I do miss from the early years of Moz… the excitement. The low lows aren’t there, but neither are the high highs. If we’d achieved at Moz what we have in SparkToro’s first 6 months, I’d be jubilant, elated, bouncing-off-my-chair… I do kinda wish I could still feel that way about hitting business goals. Now it’s more a sense of relief and “OK, got that done, time for the next thing.”

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Hi Shruti - I replied to another similar question with some details, but would definitely recommend this post: https://sparktoro.com/blog/where-should-you-start-marketing-a-new-business-or-product/. I’d also say that of the things you listed, there’s no reason they can’t all work in concert together. You make content that resonates (thought leadership), do digital PR (using other people’s platforms like LI/Quora/Podcasts/Video/etc), earn links and ranking signals (SEO), and build a pretty nice flywheel.

This post goes into more detail on that system: https://sparktoro.com/blog/why-marketing-flywheels-work/

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Hi Abhi, thanks! And yes, happy to help.

  1. Think long term. You’re going to make investments that take a long time to pay off. Frustratingly, the best marketing is often serendipitous, inconsistent in rewards, and hard to measure. That’s why most people give up and most orgs at scale aren’t willing to invest (because they need to prove ROI quarter by quarter if not faster).
  2. Honestly, use the stack that’s easy for you and your team. Low friction is worth a lot. Casey manages 99% of this for SparkToro, but we’re on Wordpress+GA+Mailchimp+Mailgun and it’s great for us.
  3. Unfortunately, I’ve never done enterprise sales, so don’t have much to offer here.
  4. Great marketers should be able to have clear, thoughtful positions on where to reach audiences, how, and with what. They should be right around half-data/half-intuition, and they should be humble enough to learn from mistakes (and successes) to keep re-orienting the marketing tactics & strategy around what works. Kindness and empathy are also markers of great marketers in my experience. If you get someone interviewing who sounds tough and hard-edged and incredibly confident, they’re probably gonna suck.

Hope that helps!

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Hi Neil - I’m not 100% sure I know what you mean by “community marketing.” That’s one of those lesser used phrases in the field that could mean anything from building a community on your own site to participating in other communities online to being a synonym for social media marketing or digital PR.

I don’t think that your product or industry should entirely dictate which channels/tactics you pursue first. It’s more about what works for you, what you’re good at, passionate about, and where your audience/customers are. Also, I wouldn’t think about content vs. community as being entirely separate. They’re often very similar and overlap. E.G. Relay’s community that we’re in right now has “content” largely dictated by whom the creators invite to the AMAs and how they structure the conversations, what they allow and don’t, how they nudge and start discussions, etc.

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Hi Shay - YES! So many things I’d do different that I wrote a whole book about them: https://sparktoro.com/book. And yes, I definitely believe that having a great product is not nearly enough to get adoption, even early. I’ve seen plenty of products fail in early and mid stages that were phenomenal, and plenty of terrible products go on to do well. There was a bookmarking+search tool called Trunkly in the 2010s that I absolutely loved. Amazing product. When I convinced folks to try it, they loved it, too. But sadly, it didn’t survive. Then I look at something like Soylent - terrible product. Generally worse than a slimfast shake. Gives a high percent of people who drink it diarrhea. Tastes bad (intentionally). But… It’s marketed toward a segment of folks who love the positioning, buy into the benefits, and wouldn’t consider the long-standing market alternatives like Slimfast or others because they’re targeted to women. Most every crypto-currency fits into this “bad product, but right timing, positioning, and marketing” paradigm. So do most conspiracy-theory cults. Qanon has had extraordinary success as a product, sold tens of millions of dollars or merchandise, overtaken people’s entire lives, but it’s obviously a terrible product.

So, yeah, great product ≠ success. And terrible products ≠ failure. It’s more complicated.

All that said, I’d definitely rather have a great product.

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Oh shoot! Sorry - missed your third question Shay.

$1B?? Hmm… Planescape Torment is a tempting choice. But $1B is probably overkill. The old Teenage Mutant Ninja Turtles arcade game was pretty amazing. Maybe I’d go for that :wink:

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