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How SparkToro Approaches Growth & Productivity (Rand Fishkin)

How SparkToro Approaches Growth & Productivity

Growth and productivity should not come at the expense of health and happiness. Rand Fishkin learned that the hard way with his first startup, Moz. When it came time to start SparkToro, he knew that he wanted to build a business differently. 

SparkToro is an audience research software tool that lets you discover the behaviors, demographics, and sources of influence for any online group.

Startup hustle culture tries to teach us that sleep deprivation and good decisions can go hand in hand, but they can’t. There are plenty of studies that bust that myth. When you are in your best head space and health space, you can do your best work. 

In this episode, Rand discusses how he’s finding ways to grow a business without creating a stressful and unhealthy culture.

Show Topics

  • Don’t put growth and productivity in front of health and happiness
  • Get rid of micromanaging
  • Use a different fundraising model
  • Build brand and sources of influence
  • Find your way to your audience through relationships
  • Spend less time on metrics
  • Dendrobates frogs (you’ll understand when you get there)

Show Links 

Check out SparkToro

Follow Rand Fishkin on LinkedIn or Twitter

Listen to the podcast

Watch a clip

Key Takeaways

09:17 – Don’t put growth and productivity in front of health and happiness

When starting SparkToro, Rand decided that he would fight against hustle culture in how the business was built and sustained. Mental and physical health had to come first.

“When you are in your best health space and head space, you can do your best work. And I think this applies particularly strongly to startup founders and CEOs and executives and leaders, because your job is not really to do the most quantity of work. Production of labor is not your most important job. Your most important job is making great decisions and you cannot make great decisions when you are in a bad head space, when you are sleep deprived, when you are burnt out. There’s 1 million studies that prove this in every kind of possible condition and yet entrepreneurs and startup hustle culture tries to teach us that somehow these ideas are compatible and they’re just not. So my goal is make great decisions by, I don’t know, playing video games for an hour in the middle of the day instead of doing my work. Great. If that’s what helps me or you make great decisions, I think that is a worthy investment and you should cheer for yourself when you do that.”

13:55 – Get rid of micromanaging

Constant check-ins and standups can create a stressful culture. A less hands-on management approach can actually give people more freedom to do their jobs well.

“I think that when you start asking why enough times, you get to some very unsettling and very nonproductive, selfish, poor incentive-aligned reasoning. And I would urge folks to toss that out. And instead to think of their jobs as managers as basically contributors and enablers. If you need help doing a thing, you tell me and we’ll get through that thing and we’ll make whatever that needs to happen happen. And you’re also a sequence creator and enabler. So you make sure that, oh, okay, well, this person cannot do this work. So let me move them onto the projects that they do need to be on and figure out sequencing and let me make sure that everyone understands what they are doing and why they’re doing it and how it contributes and what a good version of that work is and what’s not a good version of that work. Those are things that I think are useful in management, and we try to do those internally, but we don’t worry very much about deadlines.” 

20:27 – The startup world is biased toward winners

The venture capitalist startup model is very risky and it’s biased toward the big winners while so many get left behind.

“I probably had a much more glamorous journey than most startups. If you look at a, I don’t know, portfolio of venture seeking startups, maybe one in 10 will raise money successfully from an institutional investor and of 500 investments that that institutional investor makes, 450 will have terrible journeys that basically just end in tears and heartache for everyone and no money for anybody. And maybe like 45 of those 500 will have somewhere stuck in the middle of journeys. Kind of like Moz’s. And then hopefully if they’re a good investor, they sort of win on the five. Become unicorns, have big exits, those kinds of things. And so the startup model is very biased, even more so than like whatever, Hollywood or the video game world, even more biased toward a few winners with tens and hundreds of thousands of losers.”

22:53 – Troubling ethics of VC funding

VC funding can push you into a pattern of growth or die and there are troubling ethics in how that plays out.

“I think that there’s also a deeply problematic culture once you raise venture of how fast you need to grow and how big you need to grow. And there’s an expectation that you do so unprofitably so that you are constantly addicted to raising more money, which will allow investors to potentially own greater shares of your company in the future. And also gives them the sort of sense that you’re on your way to being one of those five in 500. That was also not interesting to me. I don’t have any interest in running a publicly-traded company or pursuing an IPO. I’ve had some friends who are public company CEOs and that life seems pretty horrible in a million ways. Just there’s all sorts of restrictions around your transparency. There’s a lot of people with incentives to mess with you and your business – hedge funds and just the whole stock market system and incentive model completely broken, largely unethical.”

25:42 – Use a different fundraising model

SparkToro still had to raise money, but they did so with a funding model that aimed for profitability over the long haul instead of just quick growth.

“So we open-sourced the documents. So basically removed all the specifics to SparkToro, and you can kind of use that funding model if you want, and fill in the blanks with your own numbers and details. And a few startups have done that, which is really awesome and inspiring to me. That process was not all that difficult. Whereas you have to convince venture investors that you have decent probability of being that one in a 1,000 company that moonshots. Our pitch was essentially all we need to do is build a small few million dollars a year profitable business within the next five to 10 years, and you will get your money back and then make money from the dividends that SparkToro earns over a long period of time. So you almost think of it as a far less risky type of investment because the goal is not growth at all costs. The goal is become profitable quickly and stay profitable for a long time, which means that you can survive as a business.”

30:09 – Beat the restaurant survival rate

Restaurants are a notoriously bad investment, but startups have a far worse survival rate. Rand thinks that software startups could improve if profitability came first.

“​​The restaurant business in the United States, which has a terrible reputation as being an awful investment because I think it’s something like that the five-year or seven-year survival rate of restaurants is like 50%. That is so much better than startups. Like I can’t even tell you how much. So the restaurant business, it’s around 50%, consulting by the way, consulting services, businesses agencies, have some of the highest five-year survival rates of all new businesses in the U.S., at least when I looked at the numbers a few years ago. I think it was in the seventy percent. So very comparatively low risk business in terms of surviving, getting to profitability, sticking around for a while. I think that’s awesome. My theory would be if we encourage tech-style software businesses like SparkToro to get to profitability, could we have survival rates that beat restaurants? I think so.” 

32:58 – Build brand and sources of influence

SparkToro’s marketing plan includes content, but there is also a big emphasis in two other areas: brand and sources of influence.

“When I talk about brand, what I mean is basically that we are trying to through every channel, through all our messaging, through our website, through the freemium model that we’ve got where you sign up for a free account, all of that is around building an association between I need to research an online audience or understand my competitor’s audiences or understand this area of market research. And it’s a fricking pain in the ass to crawl through a thousand LinkedIn accounts and 1,500 Twitter profiles manually and try and extract all the data out from them. SparkToro can help me do that. I can do that in a few seconds with a SparkToro search. So we’re trying to build up that brand association through all of our messaging and our positioning and content and everything else. And then sources of influence is basically let’s go find the podcasts that marketers listen to. Let’s go find the YouTube channels they subscribe to, let’s find the publications they read. Let’s find the individual people on LinkedIn or Twitter or Facebook or Instagram that they pay attention to. Let’s find the conferences and events that they attend. All of those sorts of things. The email lists they subscribe to. And be present in those places.”

36:16 – Find your way to your audience through relationships

Finding and building relationships with sources of influence for your product is something that takes time and diligence, but that’s why it puts you at an advantage.

“Our product is all about, okay, go research an audience and find out where they pay attention online. And so we do that for the audience we want to reach. And then we go find whatever, Sierra Interactive has this great email newsletter. It goes out to like 25,000 folks. All right. How do we get on that newsletter? And hopefully a few times, we don’t want to be on there just once. We’d like to be regularly included. Well, they run a conference too. Maybe we could pitch to be part of their event and like, oh, okay. Well we could do like a joint webinar with folks from their team and us. The tactic is not what matters, the process is finding a tactic that works for each individual source that reaches your audience and then pursuing those. And that is super not scalable, which means there’s not a lot of competition because people don’t like to do that work. You can’t just go pay whatever, some platform thousands or millions of dollars to be in those channels. Those creators and publishers and sources of influence, they will not take your money and include you in their editorial endorsements. You have to do it one by one, relationship building, content and context building, value creation, creativity, serendipity.” 

38:28 – Spend less time on metrics

Rand said they don’t spend time on dashboards and analytics, but on improving the overall business.

“We have the ability to measure anything. I just mean we don’t do analytics in a way where we say, how successful is this blog post? What about this one? How successful was this social campaign? What about that one? How successful was this source of influence? We don’t do it. We have no dashboards. Moz had a ton of dashboards around every type of marketing and every part of the funnels activity. And we measured it relentlessly, and we tried to optimize and find where were we missing people? Where were people falling out of that funnel? We don’t do it. And it’s very interesting to kind of look at SparkToro’s relative success and say I think a lot of that comes from not wasting time and energy optimizing the last two or 3% that we could eat out of a channel or a tactic and more imagining and thinking big about serendipitous, hard to measure investments and making those. We even do things that have technically hurt our metrics.”

45:28 – Be an artist, not an entrepreneur

Focusing too much on metrics can take you away from the reason for building the business in the first place.

“The goal is often the creation and existence of what we’re doing, not the outcome of that. It’s almost like being an artist rather than an entrepreneur, rather than a financially motivated entrepreneur in a lot of ways. I think of SparkToro as almost an art project we’re creating because we believe this thing should exist in the world. We want it to be out there and that’s true of the video. It’s true of a lot of our content. It’s true of a lot of our marketing. It’s certainly true of the product. We believe that a solution like this should exist. If we think it’s baloney that only big companies can afford to get the data that SparkToro has and it’s hundreds of thousands or even millions of dollars to run large-scale surveys and connect up, build a crawler to go crawl and extract data from a bunch of profiles on the public web. So we think it should exist for everyone. We think it should be cheap. It should not be impossible to do. And that’s why we wanted to create SparkToro. And we think that you can build a great business by doing those kinds of things.”

Content Strategy
David Khim

David is co-founder and CEO of Omniscient Digital. He previously served as head of growth at and Fishtown Analytics, and before that was growth product manager at HubSpot where he worked on new user acquisition initiatives to scale the product-led go-to-market.