This is The Marketing Hero podcast by ClearPivot, turning marketers into heroes.
Maia Wells:
Welcome to The Marketing Hero podcast, I’m your host Maia Wells. Today’s guest is one of the best-known names in SaaS marketing, and certainly isn’t holding back on some important opinions about the industry we’re all working in.
Rand Fishkin has been called one of the top minds in SEO, and it’s for good reason. He was at the forefront of some of the most recognizable companies in marketing (I’m talking about Inbound.org and Moz), he is the author of several books on marketing, SEO and entrepreneurship, and continues to push us all forward with thought leadership around authenticity, transparency and inclusiveness.
As his 2018 book Lost & Founder will candidly tell you, the journey wasn’t always smooth, but there is some kind magical quality about Rand’s timing, bravery and multi-generational digital marketing DNA. Let’s get on into it, and nerd out with Rand Fishkin.
Rand Fishkin:
Thanks, Maia. Great to be here.
Maia Wells:
Let's start out with a question we ask all of our guests. What's your favorite part of your career and how did you figure that out?
Rand Fishkin:
Oh, man. I mean, for me, it's always been the people. I think I knew it from day one, right? Just that rewarding sort of dopamine hit of helping someone and knowing that your work made their life better or easier, that they were able to accomplish something amazing because of something that you helped them with. I think far more people give me credit for helping their careers or marketing campaigns than I actually deserve, but that is certainly something that has always resonated with me.
Maia Wells:
It sounds like a really good sort of through point in your career, and I know you do a lot of thought leadership and mentoring now. I wonder though, how much of a part does timing play in the way that your interests and your career develop? Because the reason I ask is that one thing that really strikes me is the timing of things and how it seems to have worked out like so magically for you getting into web development and SEO in the very early days, continuing to be one of the first leaders in specializations like inbound and of course, most famously SEO, and now audience intelligence with your company, SparkToro, how much is timing a part of your success?
Rand Fishkin:
Gosh, let's see. I would say it is both ... For Moz, we don't know a SparkToro, right? Is audience intelligence a sector that's going to take off, is it going to be very big, or is this kind of a smaller business? We don't really know, but with Moz, absolutely timing played a pivotal role in both the success and I think many of the failures of the company. For example, when I started doing SEO and content and kind of getting Moz's marketing flywheel going back in the very early days, it was so easy to stand out. I was a crap blogger. I was a mediocre SEO at best, but I started at a time when there were very few other competitors for that audience.
The Moz blog managed to find success despite my shortcomings. Then, when Moz got into software, there were very few other software providers and SEO was of course, taking off with Google's fast rise in the early mid 2000s, and then obviously after their IPO. That timing of that software product, having the audience already built in from the blog and the consulting business, that was huge too. Then, I think, Moz made this crucial error, and I was the CEO at the time, it was my call to shift away from SEO after we raised our second large round of funding.
I thought, well, the SEO world isn't enough. I'll go after all these other plays. And we did just at the same time that SEO was growing faster than ever and that new competitors, big impressive competitors like SEMrush, which of course went public earlier this year, and an [ATrust 00:03:11], which has had a an amazing last four or five years of a run. Those two companies really hit hard, sort of taking a lot of market share away from Moz just as it was taking its eye off the SEO ball. Yeah, timing is huge. If you're Amazon before the rise of e-commerce, you're in a great position. And if you're trying to do that after Amazon's already dominating e-commerce, much, much more difficult.
Maia Wells:
Then what advice do you give to people who may be young in their careers right now who feel like, gosh, I've totally missed it? I mean, I've missed the golden age of the internet. My divine timing is not going to be like Rand Fishkin. What advice do you give to those people that are younger in their careers? Because I know you love giving advice and mentoring and really trying to move toward the future of what we all do. What do you say to somebody like that who's maybe graduating college soon and is like, well, I mean the internet has been around for 25 years. Is there any opportunity left for me?
Rand Fishkin:
Yeah, so let's see. First off, I wouldn't exclusively give that advice to someone who's young. It could be just as applicable to someone who's 60 years old and runs a small business and is thinking about how to build their online audience and they've spent the last year having to transition to a very online friendly presence because COVID has meant that everyone's in quarantine and not going out and that kind of thing. I would say the timing element is massively important if your job and goal is to build an enormous business that has venture capital scale success, which almost no business should do.
I would actually encourage anyone listening not to pursue that route. It's very high risk, very low reward, very complex, mixed incentives. There's a lot of reasons why I didn't raise venture capital for SparkToro, and wouldn't encourage other folks to do that either. Even if you're going to have a pretty amazing success, you get a company to $50 million in annual revenue, you're thinking, oh, that sounds pretty good, unless you're venture funded. In which case, well, yeah, not so good. Maybe, maybe it'll work out okay, but probably it's going to go sideways on you, just because the odds of that field are really weird.
You don't need perfect timing unless you're aiming for that, right? You don't have to be at the start of a movement. You can invest in something that is going to work for you, that's a business that you're passionate about that serves your customers well, that creates a great product that creates a good environment for your own mental health and sanity and your employees. We need more of those companies. What I want to see in the world and the economy are lots of small and medium businesses competing all with each other and sort of dividing up the wealth of the pie rather than one or two giant businesses owning and controlling everything. Obviously, if you're a venture capitalist, you need to invest in companies that'll become that monopoly, but the rest of us don't.
I think timing is far less important. If you can invest in something where you can afford to be patient, that's a beautiful freedom.
Maia Wells:
Thank you for sharing that. One thing that, that's bringing to my mind is something that you said in an interview that I saw about positioning, being one of the most important things that marketers need to pay attention to. Do you feel like positioning might be even more important than timing then in the way that you're talking about it here?
Rand Fishkin:
Let's see. Yes-ish. I think positioning is something that gives your company the opportunity to be far more successful with your marketing if you do it right, and really inhibits your marketing when you do it wrong. For those who maybe listening and are like, positioning? What do they mean when they're talking about positioning? At least for me, I mean sort of April Dunford's explanation of positioning, which is essentially, compared to the competition that solves the same problem that you solve, that your company solves, whether that's, we make a candy bar that solves your craving for sugar or we're plumbers who fix your plumbing problem at your house, or we make B2B software for accountants, whatever the problem is that you solve, how do you solve it in comparison to other solutions that your potential customers are considering and your direct competition who is in that same space, and who do you solve it for?
We are that candy bar for, I don't know, vegan health food people, or we're the candy bar for people who don't like chocolate, or we're the candy bar for people who really like Japanese bean-based treats. Your positioning is the crux of how you're going to go reach the audience that is going to resonate with the problem that you're solving and it's going to be how you differentiate yourself from other solutions.
Maia Wells:
It seems harder and harder these days to differentiate at all, because one, there's so many businesses out there trying to solve the same problems, whether that's within SaaS, where we primarily work or in other industries. Then, not only because of that, but also because the places that we have to share those positioning statements or things about our business and what we do are getting fewer and fewer. Recently, you've been really coming for Google and Facebook, right? You've even had problems with speaking gigs because of it. Can you explain to us, just in a nutshell, what is your main problem with what you're calling an internet duopoly.
Rand Fishkin:
I want a world where there is lots of competition because a world with lots of competition means less concentrated power, which means less sorts of problematic political and social influence, better incentives for everyone who's playing in a field. It means more equality of wealth. The sort of mass growth of the middle class in the United States was primarily because you didn't have a ton of monopolies. The Sherman Antitrust Act in the end of the 1800s was sort of responsible for a lot of this more responsible form of capitalism, more distributed incomes, more competition in every sector. This is a thing that we all want.
Fundamentally, I don't like Facebook and Google because they are big monopolies whose incentives are to own and control everything that we can do online. That kind of sucks. I don't love it. Second reason I don't love them is because they're super expensive for marketers. If you want to do positioning and say, hey, we do this form of SaaS for this audience, to these customers and we're better than all the competing solutions for you, in particular, customer that we serve, that's awesome. If you're trying to do that on Google, on Facebook, you are competing with tons of venture backed companies who can afford to lose way more money per new customer acquisition than you can.
Their focus is on growth rate. You're competing with public companies who, of course, have long LTVs and a lot of ... They've sort of progressed their business to where it's low churn. They can calculate out their CAC over many years. They know their recidivism rates, all this kind of stuff. That's really tough for SMBs or for new entrepreneurs, new startups. Oh, and third, and finally, the other big problem I have with them is, if you go and build your marketing presence exclusively on Facebook and Google, especially on the ad side, you're going to have a bad time, because people have not yet heard of you.
They don't know you, like you, trust you already, and so you're going to pay very high ad rates compared to, I think most of your listeners are pretty sophisticated advertising buyers. You all know that if you go and buy an ad on Google for a brand new business, brand new website, brand new brand that no one's heard of, you're going to pay through the nose to get traffic. Then someone else in your space who is well-known, has gotten a high click-through rate for a long time, has built up a ad quality score, who's got a bunch of organic engagement, they're going to have an easy time.
What you want to do is first build up organic brand strength through other channels, and then once you've got low CAC, high LTV, your whole sort of marketing stack figured out, you understand your funnel, you understand your customer dynamics, now you can go, yeah, sure, go invest a little in Google and Facebook. They have big inventory. They have a lot of reach, but man, you're going to have a lot more success if you can reach those other channels first. And Hey, if you want good places to put your dollars and feel good about it too well, that is also an advantage.
Maia Wells:
Tell us more about how companies can do that. How do companies actually build brand equity outside of Google and Facebook?
Rand Fishkin:
What I generally find is that advertisers and marketers, brand builders, they know that the first time their customers have heard of them is almost never through a Google ad or a Facebook ad. It's almost always something else. But then, yeah, it's really weird Maia, right? Then they ask the question, well, how do I do that? What do you mean? You've obviously been doing that? Obviously everything that you've ever heard of is through other channels. The problem is the degree of willingness to commit to creative non-duopoly marketing.
It's a willingness to invest in a long-term flywheel, whether that's content marketing or it's PR or it's podcast marketing or it's events or email, or one of a hundred channels that are out there, and that willingness to commit is I think stymied a lot by a fear that it will be a long period of time before you start to see that ROI, that you have to do a bunch of revolutions of that sort of flywheel investment before it starts to turn with decreasing friction.
That is true. Also, all your competitors are scared of it too. If you are willing to be patient, if you are willing to build up an email newsletter that over months and years becomes very valuable and has thousands of subscribers, but those first six months, you barely top a hundred, well, that sticktuitiveness is exactly what will power it. If you are willing to invest in a social media marketing, if you're willing to invest in content marketing, if you're willing to invest in events, or podcasts, or YouTube channels, or going on webinars or public speaking, event marketing, all of these kinds of things can bring you tremendous opportunity.
I think the easiest one is going, finding people who have already built, audiences in your space and doing co-marketing of some kind, of a million kinds, but of some kind with them. Like Maia, you happen to have a podcast. Oh, what a nice podcast you have here. Maybe some guy who's running a software as a service business that serves marketers should go on your podcast. It's those kinds of small investments that build up over time that have this amazing return on investment.
Maia Wells:
Then how does that work with the world of VC and a venture capitalist who are expecting faster results than that? You've railed recently against VC funding for SaaS, and I think that's with good reason. Do you feel like, if you are a SaaS startup wanting that, or maybe you've just got some seed funding or maybe you've gotten yourself to some other rounds of funding, how much is it possible to do those longer term marketing efforts in this environment?
Rand Fishkin:
The incentives are completely against you. Because even if your investors, let's say you raised a seed round, you're an accelerator program, you raised a series, whatever it is, your incentives are not, how do we get to profitability and stay there for a long time and be patient until we can turn our flywheel into something that's scaling with decreasing friction and becomes this amazing loop? That's not how it works. I have worked with plenty of startups. I've been there myself, where essentially it's like, okay, we did a great job last year, we ended at 40K MRR. We got to get to 100K in the next 12 months, even if it kills all of us, and destroys our personal lives, and wrecks our mental health, and eats into our entire budget.
It does not matter, because 100K MRR, that's the minimum goal we have to show in order to be able to raise our next round. Raising our next round is our priority and incentive, not building a good business or serving our customers well, or having a great product, or building something sustainable, or getting profitable, or having good fundamentals. None of those things matter. It's growth rate. It's growth rate, because your investors are trying to find, out of 200 investments that they make over the lifecycle of a fund, they're looking for those five to 10 companies in there that are going to be rocket ship unicorns, and so as every other investor after series A.
If you don't look like that fast, no one's going to pay attention to you, and you've already committed through your whatever, your previous funding to following that path. In some ways, when someone says, well, we're going the venture path, I'm kind of like, all right, hey friend, I wish you well, and also you're probably doomed. Statistically, you're doomed. You could be the one in a hundred. You could. I'm happy to help. If my sort of input and SparkToro and that kind of stuff is helpful to you, grand, wonderful, but can you afford to be patient? Probably you cannot. These incentives really work against you. The beautiful part is, if you're not in that world, you have this huge competitive advantage over everybody who is.
Maia Wells:
Tell me more about that. What does that competitive advantage look like when you're bootstrapping, for example, to get to sustainable profitability versus, blowing it all on Google ads or whatnot, to just show that MRR that you're looking for, what does that actually look like?
Rand Fishkin:
When I think about competitive advantage, it's three things. Some of it is tactical, some of it's strategic, and some of its incentives. On the tactical side, you as an entrepreneur or founder or marketer or consultant who's working with SaaS companies, who is not bound by this, hey, we have to show rapid growth even if it means losing a lot of money and wasting a lot of it on advertising. You have the option of tactics that are serendipitous, that might not ... Some might pay off now, some might pay off in a long-term future, some might not work out at all, and that's okay, you can afford to be more experimental. On the strategy side, you can afford to be patient. I think that is the biggest thing on strategy and incentives.
You can afford to be patient. You can say, hey, we are profitable today. Do we want to put a bunch of money into growth or do we want to start building a long-term flywheel that turns into something over a long period, even if we're sort of plateauing or only growing a little bit, hey, that is okay. I can afford to build up my email list, build up my social following, build up my YouTube subscribers, build up my rankings in Google, produce more content, get better at all these things, work with an agency over a long period of time to do some of that stuff, pull money away from advertising and put it into a lower cost of acquisition, but slower ROI channels.
Those are your competitive advantages, That's where you can really win. This is sort of why I love the ability to be non venture backed. Or look, there are some venture backed folks who are willing to take these risks. They're willing to say like, hey, you know what? We're in a good enough place, whatever. I don't need to hit these metrics for my next round. Fine. Great. Then you can adopt this philosophy too. But the idea is that you're breaking out of the standard, all right, here's $10 million. All right, we're throwing 9.5 of it into ads. We know that Google and Facebook, essentially, and Amazon, if you're an e-commerce, their goal, Maia, what is their goal?
Their goal is to say, oh, you're selling your software with $1,000 LTV, we would like to take $999.99 of that and charge you to acquire a customer, and you can make the penny.
Maia Wells:
Yeah, and that doesn't seem very fair. Then one other thing that you brought up too, that doesn't seem very fair is Google using and recycling our content to show in search results. You mentioned that. There's a tweet thread, you guys, so Marketing Heroes, if you haven't seen, @randfish on Twitter, and there's a recent thread that he has pinned to the very top, go and check that out because a lot of the information we're discussing right now is covered in some slides that actually Rand was asked to take out of a presentation for a speaking day because they were too controversial.
Thanks, Maia. Great to be here.
Maia Wells:
Let's start out with a question we ask all of our guests. What's your favorite part of your career and how did you figure that out?
Rand Fishkin:
Oh, man. I mean, for me, it's always been the people. I think I knew it from day one, right? Just that rewarding sort of dopamine hit of helping someone and knowing that your work made their life better or easier, that they were able to accomplish something amazing because of something that you helped them with. I think far more people give me credit for helping their careers or marketing campaigns than I actually deserve, but that is certainly something that has always resonated with me.
Maia Wells:
It sounds like a really good sort of through point in your career, and I know you do a lot of thought leadership and mentoring now. I wonder though, how much of a part does timing play in the way that your interests and your career develop? Because the reason I ask is that one thing that really strikes me is the timing of things and how it seems to have worked out like so magically for you getting into web development and SEO in the very early days, continuing to be one of the first leaders in specializations like inbound and of course, most famously SEO, and now audience intelligence with your company, SparkToro, how much is timing a part of your success?
Rand Fishkin:
Gosh, let's see. I would say it is both ... For Moz, we don't know a SparkToro, right? Is audience intelligence a sector that's going to take off, is it going to be very big, or is this kind of a smaller business? We don't really know, but with Moz, absolutely timing played a pivotal role in both the success and I think many of the failures of the company. For example, when I started doing SEO and content and kind of getting Moz's marketing flywheel going back in the very early days, it was so easy to stand out. I was a crap blogger. I was a mediocre SEO at best, but I started at a time when there were very few other competitors for that audience.
The Moz blog managed to find success despite my shortcomings. Then, when Moz got into software, there were very few other software providers and SEO was of course, taking off with Google's fast rise in the early mid 2000s, and then obviously after their IPO. That timing of that software product, having the audience already built in from the blog and the consulting business, that was huge too. Then, I think, Moz made this crucial error, and I was the CEO at the time, it was my call to shift away from SEO after we raised our second large round of funding.
I thought, well, the SEO world isn't enough. I'll go after all these other plays. And we did just at the same time that SEO was growing faster than ever and that new competitors, big impressive competitors like SEMrush, which of course went public earlier this year, and an [ATrust 00:03:11], which has had a an amazing last four or five years of a run. Those two companies really hit hard, sort of taking a lot of market share away from Moz just as it was taking its eye off the SEO ball. Yeah, timing is huge. If you're Amazon before the rise of e-commerce, you're in a great position. And if you're trying to do that after Amazon's already dominating e-commerce, much, much more difficult.
Maia Wells:
Then what advice do you give to people who may be young in their careers right now who feel like, gosh, I've totally missed it? I mean, I've missed the golden age of the internet. My divine timing is not going to be like Rand Fishkin. What advice do you give to those people that are younger in their careers? Because I know you love giving advice and mentoring and really trying to move toward the future of what we all do. What do you say to somebody like that who's maybe graduating college soon and is like, well, I mean the internet has been around for 25 years. Is there any opportunity left for me?
Rand Fishkin:
Yeah, so let's see. First off, I wouldn't exclusively give that advice to someone who's young. It could be just as applicable to someone who's 60 years old and runs a small business and is thinking about how to build their online audience and they've spent the last year having to transition to a very online friendly presence because COVID has meant that everyone's in quarantine and not going out and that kind of thing. I would say the timing element is massively important if your job and goal is to build an enormous business that has venture capital scale success, which almost no business should do.
I would actually encourage anyone listening not to pursue that route. It's very high risk, very low reward, very complex, mixed incentives. There's a lot of reasons why I didn't raise venture capital for SparkToro, and wouldn't encourage other folks to do that either. Even if you're going to have a pretty amazing success, you get a company to $50 million in annual revenue, you're thinking, oh, that sounds pretty good, unless you're venture funded. In which case, well, yeah, not so good. Maybe, maybe it'll work out okay, but probably it's going to go sideways on you, just because the odds of that field are really weird.
You don't need perfect timing unless you're aiming for that, right? You don't have to be at the start of a movement. You can invest in something that is going to work for you, that's a business that you're passionate about that serves your customers well, that creates a great product that creates a good environment for your own mental health and sanity and your employees. We need more of those companies. What I want to see in the world and the economy are lots of small and medium businesses competing all with each other and sort of dividing up the wealth of the pie rather than one or two giant businesses owning and controlling everything. Obviously, if you're a venture capitalist, you need to invest in companies that'll become that monopoly, but the rest of us don't.
I think timing is far less important. If you can invest in something where you can afford to be patient, that's a beautiful freedom.
Maia Wells:
Thank you for sharing that. One thing that, that's bringing to my mind is something that you said in an interview that I saw about positioning, being one of the most important things that marketers need to pay attention to. Do you feel like positioning might be even more important than timing then in the way that you're talking about it here?
Rand Fishkin:
Let's see. Yes-ish. I think positioning is something that gives your company the opportunity to be far more successful with your marketing if you do it right, and really inhibits your marketing when you do it wrong. For those who maybe listening and are like, positioning? What do they mean when they're talking about positioning? At least for me, I mean sort of April Dunford's explanation of positioning, which is essentially, compared to the competition that solves the same problem that you solve, that your company solves, whether that's, we make a candy bar that solves your craving for sugar or we're plumbers who fix your plumbing problem at your house, or we make B2B software for accountants, whatever the problem is that you solve, how do you solve it in comparison to other solutions that your potential customers are considering and your direct competition who is in that same space, and who do you solve it for?
We are that candy bar for, I don't know, vegan health food people, or we're the candy bar for people who don't like chocolate, or we're the candy bar for people who really like Japanese bean-based treats. Your positioning is the crux of how you're going to go reach the audience that is going to resonate with the problem that you're solving and it's going to be how you differentiate yourself from other solutions.
Maia Wells:
It seems harder and harder these days to differentiate at all, because one, there's so many businesses out there trying to solve the same problems, whether that's within SaaS, where we primarily work or in other industries. Then, not only because of that, but also because the places that we have to share those positioning statements or things about our business and what we do are getting fewer and fewer. Recently, you've been really coming for Google and Facebook, right? You've even had problems with speaking gigs because of it. Can you explain to us, just in a nutshell, what is your main problem with what you're calling an internet duopoly.
Rand Fishkin:
I want a world where there is lots of competition because a world with lots of competition means less concentrated power, which means less sorts of problematic political and social influence, better incentives for everyone who's playing in a field. It means more equality of wealth. The sort of mass growth of the middle class in the United States was primarily because you didn't have a ton of monopolies. The Sherman Antitrust Act in the end of the 1800s was sort of responsible for a lot of this more responsible form of capitalism, more distributed incomes, more competition in every sector. This is a thing that we all want.
Fundamentally, I don't like Facebook and Google because they are big monopolies whose incentives are to own and control everything that we can do online. That kind of sucks. I don't love it. Second reason I don't love them is because they're super expensive for marketers. If you want to do positioning and say, hey, we do this form of SaaS for this audience, to these customers and we're better than all the competing solutions for you, in particular, customer that we serve, that's awesome. If you're trying to do that on Google, on Facebook, you are competing with tons of venture backed companies who can afford to lose way more money per new customer acquisition than you can.
Their focus is on growth rate. You're competing with public companies who, of course, have long LTVs and a lot of ... They've sort of progressed their business to where it's low churn. They can calculate out their CAC over many years. They know their recidivism rates, all this kind of stuff. That's really tough for SMBs or for new entrepreneurs, new startups. Oh, and third, and finally, the other big problem I have with them is, if you go and build your marketing presence exclusively on Facebook and Google, especially on the ad side, you're going to have a bad time, because people have not yet heard of you.
They don't know you, like you, trust you already, and so you're going to pay very high ad rates compared to, I think most of your listeners are pretty sophisticated advertising buyers. You all know that if you go and buy an ad on Google for a brand new business, brand new website, brand new brand that no one's heard of, you're going to pay through the nose to get traffic. Then someone else in your space who is well-known, has gotten a high click-through rate for a long time, has built up a ad quality score, who's got a bunch of organic engagement, they're going to have an easy time.
What you want to do is first build up organic brand strength through other channels, and then once you've got low CAC, high LTV, your whole sort of marketing stack figured out, you understand your funnel, you understand your customer dynamics, now you can go, yeah, sure, go invest a little in Google and Facebook. They have big inventory. They have a lot of reach, but man, you're going to have a lot more success if you can reach those other channels first. And Hey, if you want good places to put your dollars and feel good about it too well, that is also an advantage.
Maia Wells:
Tell us more about how companies can do that. How do companies actually build brand equity outside of Google and Facebook?
Rand Fishkin:
What I generally find is that advertisers and marketers, brand builders, they know that the first time their customers have heard of them is almost never through a Google ad or a Facebook ad. It's almost always something else. But then, yeah, it's really weird Maia, right? Then they ask the question, well, how do I do that? What do you mean? You've obviously been doing that? Obviously everything that you've ever heard of is through other channels. The problem is the degree of willingness to commit to creative non-duopoly marketing.
It's a willingness to invest in a long-term flywheel, whether that's content marketing or it's PR or it's podcast marketing or it's events or email, or one of a hundred channels that are out there, and that willingness to commit is I think stymied a lot by a fear that it will be a long period of time before you start to see that ROI, that you have to do a bunch of revolutions of that sort of flywheel investment before it starts to turn with decreasing friction.
That is true. Also, all your competitors are scared of it too. If you are willing to be patient, if you are willing to build up an email newsletter that over months and years becomes very valuable and has thousands of subscribers, but those first six months, you barely top a hundred, well, that sticktuitiveness is exactly what will power it. If you are willing to invest in a social media marketing, if you're willing to invest in content marketing, if you're willing to invest in events, or podcasts, or YouTube channels, or going on webinars or public speaking, event marketing, all of these kinds of things can bring you tremendous opportunity.
I think the easiest one is going, finding people who have already built, audiences in your space and doing co-marketing of some kind, of a million kinds, but of some kind with them. Like Maia, you happen to have a podcast. Oh, what a nice podcast you have here. Maybe some guy who's running a software as a service business that serves marketers should go on your podcast. It's those kinds of small investments that build up over time that have this amazing return on investment.
Maia Wells:
Then how does that work with the world of VC and a venture capitalist who are expecting faster results than that? You've railed recently against VC funding for SaaS, and I think that's with good reason. Do you feel like, if you are a SaaS startup wanting that, or maybe you've just got some seed funding or maybe you've gotten yourself to some other rounds of funding, how much is it possible to do those longer term marketing efforts in this environment?
Rand Fishkin:
The incentives are completely against you. Because even if your investors, let's say you raised a seed round, you're an accelerator program, you raised a series, whatever it is, your incentives are not, how do we get to profitability and stay there for a long time and be patient until we can turn our flywheel into something that's scaling with decreasing friction and becomes this amazing loop? That's not how it works. I have worked with plenty of startups. I've been there myself, where essentially it's like, okay, we did a great job last year, we ended at 40K MRR. We got to get to 100K in the next 12 months, even if it kills all of us, and destroys our personal lives, and wrecks our mental health, and eats into our entire budget.
It does not matter, because 100K MRR, that's the minimum goal we have to show in order to be able to raise our next round. Raising our next round is our priority and incentive, not building a good business or serving our customers well, or having a great product, or building something sustainable, or getting profitable, or having good fundamentals. None of those things matter. It's growth rate. It's growth rate, because your investors are trying to find, out of 200 investments that they make over the lifecycle of a fund, they're looking for those five to 10 companies in there that are going to be rocket ship unicorns, and so as every other investor after series A.
If you don't look like that fast, no one's going to pay attention to you, and you've already committed through your whatever, your previous funding to following that path. In some ways, when someone says, well, we're going the venture path, I'm kind of like, all right, hey friend, I wish you well, and also you're probably doomed. Statistically, you're doomed. You could be the one in a hundred. You could. I'm happy to help. If my sort of input and SparkToro and that kind of stuff is helpful to you, grand, wonderful, but can you afford to be patient? Probably you cannot. These incentives really work against you. The beautiful part is, if you're not in that world, you have this huge competitive advantage over everybody who is.
Maia Wells:
Tell me more about that. What does that competitive advantage look like when you're bootstrapping, for example, to get to sustainable profitability versus, blowing it all on Google ads or whatnot, to just show that MRR that you're looking for, what does that actually look like?
Rand Fishkin:
When I think about competitive advantage, it's three things. Some of it is tactical, some of it's strategic, and some of its incentives. On the tactical side, you as an entrepreneur or founder or marketer or consultant who's working with SaaS companies, who is not bound by this, hey, we have to show rapid growth even if it means losing a lot of money and wasting a lot of it on advertising. You have the option of tactics that are serendipitous, that might not ... Some might pay off now, some might pay off in a long-term future, some might not work out at all, and that's okay, you can afford to be more experimental. On the strategy side, you can afford to be patient. I think that is the biggest thing on strategy and incentives.
You can afford to be patient. You can say, hey, we are profitable today. Do we want to put a bunch of money into growth or do we want to start building a long-term flywheel that turns into something over a long period, even if we're sort of plateauing or only growing a little bit, hey, that is okay. I can afford to build up my email list, build up my social following, build up my YouTube subscribers, build up my rankings in Google, produce more content, get better at all these things, work with an agency over a long period of time to do some of that stuff, pull money away from advertising and put it into a lower cost of acquisition, but slower ROI channels.
Those are your competitive advantages, That's where you can really win. This is sort of why I love the ability to be non venture backed. Or look, there are some venture backed folks who are willing to take these risks. They're willing to say like, hey, you know what? We're in a good enough place, whatever. I don't need to hit these metrics for my next round. Fine. Great. Then you can adopt this philosophy too. But the idea is that you're breaking out of the standard, all right, here's $10 million. All right, we're throwing 9.5 of it into ads. We know that Google and Facebook, essentially, and Amazon, if you're an e-commerce, their goal, Maia, what is their goal?
Their goal is to say, oh, you're selling your software with $1,000 LTV, we would like to take $999.99 of that and charge you to acquire a customer, and you can make the penny.
Maia Wells:
Yeah, and that doesn't seem very fair. Then one other thing that you brought up too, that doesn't seem very fair is Google using and recycling our content to show in search results. You mentioned that. There's a tweet thread, you guys, so Marketing Heroes, if you haven't seen, @randfish on Twitter, and there's a recent thread that he has pinned to the very top, go and check that out because a lot of the information we're discussing right now is covered in some slides that actually Rand was asked to take out of a presentation for a speaking day because they were too controversial.
A lot of this conversation is inspired by that tweet thread. We just thought it was so important to start talking about this. One of the little pieces that you throw in, in that thread, is really the co-opting of our content. How does that work? Tell us more about that and why are IP lawyers not all over this? What's the deal there?
Rand Fishkin:
The IP lawyer thing, I think that goes back to the Clinton administration and how a whole bunch of rules around internet content and showing it, etc, and because Google is free to opt out of, you can tell Google not to crawl your stuff, but then of course, you won't get traffic.
Maia Wells:
Yeah, then it's not going to crawl your stuff.
Rand Fishkin:
Yeah. Google's model essentially was like this 20 year Trojan horse. They roll it up to the gates of the internet, and secretly inside the horse, are a whole bunch of content thieves that are going to take your stuff and serve searchers and web visitors without ever sending you any value. Google kind of did this one by one, industry by industry. The news industry a lot of folks point to, local news in particular, but also many of the major publications is, hey, the news business was essentially taken by Google who offered publishers, news publishers tons of traffic in exchange for freely providing their content.
Then what those publishers did not realize is that, once Google became the monopoly for how people found and consumed content, they were stuck in a prisoner's dilemma, right? Like, well, all right, Wall Street Journal, you're not going to give me your content, turns out New York Times over there is. So, that's all right. We'll just work with the New York Times, and off to the chopping block your traffic goes. That's a rough, rough way to go. Yeah, I think journalism employment and revenues are down like 90% plus from where they were in the late 1990s. That's hard.
Then, this happens in sector after sector. Google enters finance and all this sort of financial data providers struggle as a result. Google enters jobs, and you see a lot of jobs boards were panicking now. Google enters maps, and basically every other maps provider was wiped out around 2000/'6/'7/'8 Google entered weather, that obviously too ... Google entered flights and hotels, and a ton of the meta travel search engines lost just everything. It's hard out there. Google does not need to play fair at all. They can use their monopoly power in one sector search to unfairly compete in all of these other sectors.
If Google wants to get into podcasts, what are you going to do? Are you going to not offer your podcast to Google, but then when they play it, do they need to provide you with any data or give you any value to the listeners, or give you ability to reach them? No, they don't have to do any of that. It's hard. What are you going to do? My response to this generally has been, let's build up some marketing strength and some audience engagement off of Google and Facebook. Facebook's the same way, right? You build up your audience on Facebook, you used to be able to post and reach them. Now, average engagement rate is like 0.09%. You're not going to reach your Facebook fans anymore, not without paying, certainly.
What can you do? You can get people to your website and your email list where you own and control your destiny.
Maia Wells:
This is bringing up a question for me, which might be a little personal, but you come from search. At the beginning of your career, of course, you're building a few websites, doing that, and then it evolved into really a focus on SEO. I'm assuming here, but it feels like perhaps at the beginning, in the early 2000s, you may have felt differently about Google. Using it as a partner, a tool, let's work with Google and with Google's algorithm and figure out how to get this wonderful content out to people who are searching for it.
What changed in, let's say the last 15 years? I'm assuming that you probably felt a little more positive about Google at that time to be able to try and teach people how to work with it. Right? What changed. Is it that just that they are so huge now and making all this money? Or what has it been that personal journey for you?
Rand Fishkin:
Yeah. I think the Trojan horse example is really salient here, where essentially, I was whatever. I was someone in Troy, and oh, look at the Athenians. They've dropped off this beautiful horse. What a beautiful horse.
Maia Wells:
Yeah, what a great gift, right?
Rand Fishkin:
What a great gift. Google is sending me all this free traffic, they're providing so much opportunity. They're making the internet like a better place. They were this wonderful place to work and they had this incredible culture, and they were transforming all these things. So, you bring the horse inside your walled city. Oh, what a nice present. Then, only then, do you realize when night comes and Google's monopoly has grown indomitable and no one can really touch them, and they've been one of the leading lobbiers in the United States, have a lot of political power, obviously had a ton of influence and sway, particularly with the Obama administration.
Antitrust activity was sort of on hold and still seems like it kind of is. They won the day. When night falls, all these content thieves come out and they come and take sector after sector, maps, and weather, local and flights, and hotels, and jobs, and finance, and Google color picker, and Google animal sounds, and Google speed test. Oh man, this is rough, Google instant answers, Google knowledge graph, Google Netflix results, right? Google best TV shows, just sector after sector. Whatever it is. My last research was two-thirds. Two-thirds of all Google searches benefit exclusively Google and Alphabet's properties.
And about a third of Google searches actually go to a non-Alphabet website after they leave Google. The website that wins the most, that gets the most traffic from Google, YouTube. Oh, look at that, because Google basically placed YouTube above everybody else, and no one else can really get into the video results, and so here we are, Google managed to use their search monopoly to make YouTube the winner in online video as well. I think we should all count our blessings that they weren't able to win with Google+ and take over that sector as well, but look, I mean, Facebook with Instagram and WhatsApp, they obviously have very much dominated that space, and even their competitors are like, well, am I cheering for TikTok? I don't know if I am. Am I cheering for Snapchat? I'm not sure.
I think that's a tough space, and this is why, I think, a lot of folks in the marketing and advertising world don't always love to hear my thoughts on the topic. They're like, "Hey, those are our partners. That's where we spend all our money. We don't want to make them angry." And I'm kind of like, "Well, I want to make them angry. I'd like for them to reflect on their actions." That disenchantment was a long slow process for me, Maia. I didn't wake up one and was like, oh, Google's evil. It was sort of like, gosh, I don't like this that they're doing, but I do like this that they're doing. Oh, I don't like that. Then it just kept building.
Maia Wells:
Let's say some of the antitrust efforts do continue and Google and/or Facebook are broken up, or regulated in some way that limits this power, what does that world actually look like for you as a founder, for others as marketers or advertisers? What would be the ideal, if not the duopoly, what should it look like, Rand?
Rand Fishkin:
I am not an antitrust attorney. I don't know this stuff, but if I could wave my magic wand and make something happen, the first thing I would do is split up both Facebook and Google into a few different companies. I think Google, and YouTube, and probably Google Maps should be three separate companies. I would also almost certainly break up Facebook and Instagram, and maybe WhatsApp as well. The sec probably should not have approved, in retrospect, those acquisitions. That was too much consolidated power. I think the big challenge here is the measure of, in antitrust law, in the United States at least, the measure of whether a company is violating antitrust is based on, did consumers pay more? Because that was, in an old retail economy, that was the way it makes sense.
In an information and data economy, it makes no sense to have that be the standard, but the law has not evolved yet. That's tough. We're going to have to figure out how we merge technology and the legal interpretation of the constitution to a savvier place. But unfortunately, the people making those laws and interpreting those laws are not the digitally savvy ones. I think they're not the folks who have the perspective that those of us who were in the industry do. Hey, I am not holding my breath for this, but we, as business owners and entrepreneurs, we can make these choices, at least in our own businesses, and get competitive advantages out of it, and still get the duopoly to perform for us.
Rand Fishkin:
Look, I think it's a win-win if you are willing to invest in sort of influence marketing outside of Google and Facebook.
Maia Wells:
I think one of the things that is sort of underlying this vision that you haven't said quite in these words, it might be something like a more egalitarian access to people to information, more authentic engagement with perhaps our customers. Are those things that go through your mind as well, in addition to the legal aspects of it, maybe the financial aspects of it? What about kind of the social aspects of it that would result from a weakening of this power, duopoly?
Rand Fishkin:
Yeah. I think a ton in terms of really two guiding forces for a digital world, and those are algorithms and incentives. The incentives of Google, Facebook, Amazon, and Apple, and Microsoft, versus the incentives of venture backed businesses and venture investors, versus the incentives of small and medium business owners and folks who are trying to build sort of profitable long-term businesses. Then the algorithms that govern all of us, which really flow from the big tech giants, those sort of pervade my thinking a little bit more than maybe the social aspects. I think it's just really tough to convince a SaaS marketer, hey, you should do this because it's the right thing to do, instead of, it's the profitable thing that your CEO needs you to do, right?
Getting people to go against their incentives, even when it's the so-called right thing, I haven't found a ton of success driving action that way and inspiring people that way. I'll still talk about it, like, Maia, you are 100% right. From a political and social perspective, for example, it would be a beautiful thing if Facebook had not captured all of us into their ecosystem of algorithmic engagement, to get more views and to keep people on their site longer and to get all this data about us so that they could advertise to us. That's not healthy for society. It's not great for politics, as we've seen from the last few years. It's not great for mental health. All these kinds of things.
But telling an advertiser, hey, you should stop Facebook ads because of mental health and social policy and these kinds of things, they're like, no, that's not a compelling argument. My competitors are still going to do it. Facebook isn't going to lose enough money from me to make it worthwhile. They're in a prisoner's dilemma, just like we all are, just like all of our websites are with Google. What's the realistic response? The realistic response is, for these intelligent business and marketing cost of customer acquisition, scalability of business, profitability, long-term survivability, for all those reasons, I can get people to do the right thing anyway. So, it's nice that they align.
Maia Wells:
One of the biggest pieces of that puzzle really seems to be finding your own way to engage with your audience, to get data about your audience and to make decisions on that data. Tell us a little bit more about how those ideas relate to your newest business, SparkToro.
Rand Fishkin:
Yeah. This conversation that we've been having, this is the inspiration for why I was like, well, what's my next company going to be like? What do I want to build? I wanted to build something that would help people break out of that duopoly and break into all of the sources of influence that already reached their customers and their audience. The problem that I found that so many marketers have is just discovery. We made this amazing new SaaS product for chemical engineers. Great, where the freck are we going to reach them if it's not Facebook and Google ads? Well, what if we could go visit every chemical engineers online profile and look at everything they follow and share and talk about and hashtags they use and follow and social accounts they engage with and websites that they share and talk about, and YouTube channels, blah, blah, blah, blah?
What if we could go, analyze all of those, and show them to you in a big list and tell you what percent of chemical engineers follow this podcast, this YouTube channel, this press account, this website, this social, would you then be able to go do smart marketing in all those places? Yes. Is that possible to build? This is what Casey and I spent a couple of years building, and we were like, oh my God, it's possible. So, a year ago, we released that, and so far it's been going well. That's essentially what SparkToro helps with. It's not the only way to do it. You can do this manually. You get a few hundred, a few thousand of your customers's, or potential customers's social accounts and public profiles and names and info, great.
Go visit their LinkedIn, go visit their Twitter, go visit their Reddit, go visit their Facebook page, their Instagram page, and sort of see what's going on there and maybe start to collate it all in Excel. Fine. That's great, if that works for you. If you want to do it fast, you can do it with SparkToro pretty easily for virtually any online audience. We can give that to you in just a few seconds. That searchable database is a nice thing to do. I don't recommend surveys and interviews for this anymore. I think pre sort of technology world, that was the only way to go. But when you ask people what podcast they listen to, they tend not to tell you the ones that are sort of relevant to you and your industry, and uniquely relevant to ...
Like a chemical engineer might be like, oh yeah, I listened to some podcasts, which one? I listen to the PC Gamer Podcast because I like video games. Great. That doesn't help me, right? What you need is like a sample of a thousand chemical engineers and then seeing all the things they pay attention to and what is unique about that group versus every other group. Now you start to get good data. I think surveys and interviews are great for other things in market research, but not for this.
Maia Wells:
Okay. Let me ask a devil's advocate question, Rand.
Rand Fishkin:
Please.
Maia Wells:
Does this data mining or data analysis, whatever you might want to call it, make you part of the evil? Because we're saying, we don't like being watched, we don't like this, we don't like that. Although most people are still agreeing to any terms of service Facebook throws to us, but so are you part of the problem?
Rand Fishkin:
Up to everyone else to decide, right? Not my call to make. The reason that I don't think what we're doing is evil is we crawl only publicly available data that people have publicly said like, yes, here is my Twitter profile, my LinkedIn profile, I want it to be public. Here's the data that I'm opting into sharing. Anything that Google can crawl, we can crawl. Anything Google can't crawl, we also cannot crawl. And we never show data about, for example, you. Maia, we might have your, whatever, Maia's LinkedIn, and points to her Twitter, and then her Facebook page. We've got her Instagram page. Okay, here's, Maia's profile. We never show that to anybody.
We basically throw away your name and any personally identifiable information and we just put, oh, podcast host. Now, when someone types in podcast host, you'll be one of several thousand people whose behavioral statistics are analyzed, but it's aggregated. If you think census data is evil, you'll probably think SparkToro is evil. If you think census data is pretty cool, you'll probably think SparkToro is pretty cool.
Maia Wells:
Well, that sounds like a really good way to try and do marketing and advertising, and also audience research, market research outside of the duopoly. Do you have anything that you have on the horizon with SparkToro or other projects that you think people should know about?
Rand Fishkin:
Yeah. one that's interesting inside SparkToro itself is we're about to launch demographics, which is something that a lot of folks have asked us about. We will be limiting some of those demographics in certain ways. For example, people have sort of asked for like, hey, can we get race and ethnicity and religion? We're like, no. We're not doing anything that you could reasonably discriminate an audience on. Look, I mean, Facebook did that for years, and obviously you can see all the things like, oh, the Trump campaign is going to tell black voters in these cities to go to the wrong place. I recognize there's good things you can do with that data too. There really are. I've talked to some wonderful organizations who want it, but we're just not willing to take the risk.
What we are doing is providing a lot more demographics around like interests, education. We are providing data about gender and age, geography, and a few other attributes that I think a lot of folks will be interested in. If you are interested in demographic audience modeling for like persona development or pitching your client on a new audience, SparkToro is about to become much more valuable for that, sort of replacing a lot of what was lost in ... Do you remember the old Facebook insights section? Before the Cambridge Analytica scandal, they had all this rich data about your sort of falling. SparkToro can start to replace some of that through publicly available data. Right?
Maia Wells:
Rand, I have to ask you one last question, because you are so smart and confident, you're well-spoken, you're ambitious. How much-
Rand Fishkin:
These are all lies, but I appreciate them.
Maia Wells:
These are terrible lies, but you are. Anyone that follows you gets something out of what you share. I certainly do. I know, I'm a fan of yours, and this has been a real treat for me to be able to talk to you. I am wondering, how much of that do you get from your mom?
Rand Fishkin:
Oh gosh, what a great question. I don't honestly know. I mean, my mom was always marketing savvy, because she ran a marketing business, so she started the company that became Moz in 1981, obviously under a different name, but then ran it for 20 years as like this, helping people with like their Yellow Page ads and logos and letterheads and stuff, just local Seattle companies, and then I joined the business, we got into web stuff. But yeah, I'm sure some of that must've bled over. Just kind of, hey, we need to understand our customers, hey, we need to teach people how to do this better. I think I've always had sort of ... You can probably tell. I know you'll be shocked to hear that Rand is something of a contrarian.
Maia Wells:
Yes.
Rand Fishkin:
Wait, really? You? No.
Maia Wells:
Who? Rand Fishkin? No.
Rand Fishkin:
No. People say it's a flow. But yeah, I think that was an early streak that started for me and sort of my frustration with the SEO world and how it's perceived as black hat, and then wanting to teach people how to do it in more ethical ways. But it was absolutely the case that I'm sure those formative experiences ... My brother and sister and I, we all grew up under my mom's desk. She'd be working, she had an office near our respective schools. We'd all like go after school to my mom's office and whatever, sometimes walk to the comic book store or whatever. But yeah, it had to have influenced me.
Maia Wells:
Well, I mean, even just as somebody that is watching from the outside, and for those of you who don't know about Gillian Muessig, you can look her up. That's Rand's mom. She's an excellent speaker. She wants to educate people about these topics. Even sometimes your gestures and your inflections are similar, right? From an audience perspective, you look similar to your mom in certain ways and you look-
Rand Fishkin:
Genetics is hard to avoid, right?
Maia Wells:
It's hard to avoid. Yeah. Just from the outside looking in, she was an entrepreneur early on, and you're a serial entrepreneur yourself and things like that. I just found it really interesting looking into you and your mom together. I think a lot of us didn't have that type of experience growing up, that our parents worked in other industries or in more traditional brick and mortar businesses, or ... It's that whole rich dad, poor dad thing. Do you grow up with someone who encouraged you to have your own ideas, start your own businesses from that? Or did you grow up with somebody who encouraged you to get that nine to five job with a 401k?
I just see a lot of those kinds of parallels here, and I wanted to ask you about that, if you felt like you're really influenced by your mom.
Rand Fishkin:
Yeah. I mean, my mom was always very supportive on that front, but the rest of my family, for sure, I mean, my dad just ... I don't think he ever really got over the fact that I dropped out of college and went into credit card debt, took these entrepreneurial risks. That was just not okay with him. My grandparents who I was always very close to, but they had a big problem with it too. In the Jewish sort of faith and culture, education and a very structured job are paramount. I don't think ... Then I married an Italian Catholic girl. It just-
Maia Wells:
Yeah, those structures are big in your life, huh?
Rand Fishkin:
Yeah, right? Like I'm just violating all the norms.
Maia Wells:
Man.
Rand Fishkin:
I'm probably the first person in like 2,000 years to marry outside of my culture. Well, hey, what are you going to do? You love who you love. Yeah, I think those sorts of things are ... That kind of rebelliousness is a little bit in my nature, and maybe less from family.
Maia Wells:
Do you think that, that rebelliousness has been one of the crucial aspects of your success?
Rand Fishkin:
It's so funny. Maia, I realize this is quite personal, but I don't think of myself as very successful. I think of myself as a striving entrepreneur, someone who's like, I am trying to get a business off the ground, and hopefully one of them will reach kind of the finish line, like Moz, whatever Moz. Maybe it someday will sell and have an exit and maybe that'll turn some money for shareholders and stuff, but it's pretty clear that it's not going to meet its investors sort of minimum return requirements. It kind of plateaued and has been growing, but it's too slow to really be exciting.
SparkToro, right? SparkToro is ... I'm super excited about the idea. We're profitable. We are growing at a good clip, but is it going to reach what it needs to reach? Granted that bar is way lower than it was with a venture backed business, but I still think of myself as one of those, well, let's see whether Rand can be considered successful in his career someday, as opposed to somebody who's had success. Maybe that's just the problem with swimming in entrepreneurial waters. You're surrounded by people who have a lot more money than you and might not be as well known among internet marketing nerds like us. But have careers that have built up to their sort of requirements and definitions for success and mine.
I don't know. Maybe it will someday. Fingers crossed. Yeah, in terms of like having that, whatever it is, that exit or reaching this frustratingly American definition of success, which is very financial. So far, hey, we're still paying our mortgage and keeping our fingers crossed for the future.
Maia Wells:
Yeah, and so are a lot of us out here. Definitely identifying with you on that and just being someone that's doing the work every day and trying to do a better job at it, and trying to make the world a better place for other people. That sounds kind of trite, but you are. I mean, that's a lot of the things that you're working towards right now. You're fighting against some pretty big giants out there, conceptually, and it's inspiring for those of us who are working in those trenches as well with you and following along on that journey.
To us, you are a celebrity. You said one time, I'm a celebrity to a small number of very specific nerds on the internet. When I heard that you say that, it just literally made me laugh out loud.
Rand Fishkin:
Yeah, Oh my God.
Maia Wells:
Yeah, I'm one of them.
Rand Fishkin:
We're a collective. We are a wonderful community of people. This is my favorite thing about internet marketing, for sure, Maia, is just, I get to meet people like you who are so thoughtful and empathetic and just kind, and then we get to help each other in our careers. It's not that ... A startup world can be great, but man, when I spent time in Silicon Valley fundraising and stuff, the relationships are so transactional. As soon as Moz's growth was sort of slowing and we weren't hot-check company anymore, I didn't get invited to those dinners anymore. Those people didn't call me. If I emailed them when I was coming to the Valley, they didn't reply.
It's just that ugly feeling of all you are in San Francisco, and this is, I'm generalizing, but all you are is how successful your last company was. I'd much rather hang out with the agency owner who's having a hard time, with the marketer who's just getting their career going, those people are my people.
Want to Reach Rand Fishkin?
rand@sparktoro.com "I'm happy to help anyone and everyone all the time."
