Hello everyone,
Welcome to the third edition of Founder's session.
Today's guest is someone really special, whom I personally have a lot of admiration when it comes to marketing, SEO in particular.
He was the Founder and CEO of Moz and left the company in early 2018. After leaving Moz, he started working on a completely different product in audience research and intelligence data.
Yeah, we are going to have a chat with Rand Fishkin, mainly about his new product SparkToro, which is going to be launched soon.
There are a lot of interesting aspects to discuss with Rand about SparkToro and a few more things. So, let's get into it.
Hi Rand, Thanks so much for joining us for a chat. I have been following SparkToro since the day you left Moz and announced it as the project you are going to be working on. Delighted to have you to share your thoughts and experiences on building SparkToro.
For some of our readers who might not know, can you explain what is SparkToro and what is the problem it solves as a SaaS product for a business?
Of course! SparkToro is a market research tool, specifically focused on answering the question: “Where can I best reach any audience online?”
The tool exists to help product folks, marketers, researchers, founders, PRs, and other professionals who want to better understand their audiences: what they read, watch, listen to, follow, how they describe themselves, and where they pay attention. This data’s invaluable for product development, positioning, and marketing, but, today, it’s ludicrously difficult to come by without a massive budget and months of work. We want to make it as easy as searching Google.
What was the primary motivation behind building SparkToro? What was the push towards working on the MVP as it is a completely different product and target market to what you did with Moz? An SEO related product would have been much easier for you to do a Product-Market fit, build an MVP, attract investors and presell it purely due to the huge authority you have in that space.
Well, yes and no. First off, I think nearly every SEO function and feature has already been done well by an existing player in the SEO software market. Thus, we’d have to build a much better version in order to compete. Second, I have a non-compete with Moz, my old company 🙂
The big motivation for SparkToro was helping small businesses and start-up have the same access to high-quality audience intelligence that big companies with giant budgets, the assistance of market research agencies, and the ability to build custom crawlers of their audience’s online data have. We think it sucks that Facebook and Google know exactly where to place your ads to reach your audience, but they won’t tell what those places are (exactly) because that reduces their leverage in the online ad marketplace. It doubly sucks that big companies have this outsized advantage in being able to contract large surveys of their existing audience and run expensive analyses of their customers’ social+web profiles, but that same process is out of the reach of SMBs.
Hence, SparkToro. We saw folks doing this really smart process of crawling and extracting data from social and web profiles at scale for their customers, and reaping massive rewards in their ability to understand and market to them. We realized we could do potentially the same thing, and have been building toward that since June of 2018. It’s pretty exciting that it’s finally a reality, as I’ll admit there were plenty of times in the first year or so when I worried if the technology was even feasible.
What are the primary channels you have used to market and presell SparkToro until now? Are there any plans to expand to new channels of marketing?
For our own product? We’ve been very social media and content marketing-driven, with a healthy side of conferences and events (up until Covid-19). Thankfully, I had a substantial social following across LinkedIn, Facebook, Twitter, and a healthy number of offers to keynote big events over the last couple of years. We used most of those opportunities to help educate people about the problem (the Facebook/Google duopoly, the challenges of marketing with good audience intelligence, the existing opportunities for getting that data, etc).
Once folks reached our website (a couple hundred to a couple thousand each day), we nudged a sign-up to the early access/beta email list to be notified when access was ready. From that list, we signed up our ~450 beta testers and many thousands of free, early-access users.
Long term, I suspect most of our marketing will continue to be social and content, but podcasts, video, and PR are all shaping up to be strong additional elements at and after public launch.
What is your vision for SparkToro and what are the expansion plans in the next 2 to 3 years?
I shared a tweet recently that perfectly describes the kind of company I want to build over the next few years.
In short, a company that has healthy growth, happy employees with work hours of just 20-30 hours, no meetings, and profitable.
At this point, who would you define as an ideal target customer of SparkToro? It can be used across industries at all levels, but which would you say as a target market towards whom your marketing efforts would be?
Our heaviest early customers have been two groups. The first is in-house marketers who do regular launches of content, product, and PR campaigns (and thus, are always seeking new outlets and sources of influence through which to reach their various audiences). The second is agencies with a focus on marketing strategy, PR, and/or content who have clients in need of data on their audience(s) and how to reach them.
Over time, I’m hopeful we can expand to more groups (product marketers, founders, entrepreneurs, social media marketers, etc).
It is quite incredible that you decided to launch SparkToro during these extreme times. Although it shows the confidence and belief you have on the product, I am sure you and Casey would have had some second thoughts about it. What made you decide and go ahead with the launch?
We definitely did. In fact, this new launch date was one we decided to push from an original target in March. When Covid-19 overran the online conversation in every space, we realized that the launch of a niche marketing/tech product just wasn’t appropriate, and decided to wait until those conversations resumed. In the last few weeks, we saw, in particular, ProductHunt and Indiehackers note that their traffic levels had first dipped, but then returned to a higher-than-normal level. That told us there was interest in tech products and launches again, and that, at least for some folks, returning to a level of normalcy in their online work was happening.
We also recognized that, although it’s a really small way, our product can be helpful to folks struggling with advertising and paid marketing costs, and looking for creative ways to reach their audiences without having to pay the big networks directly. Low-cost marketing is always in need during recessions.
When I reviewed SparkToro, the only negative I pointed out was the lack of native integrations with any other third-party tool or Zapier. Are there any plans to build these, particularly with cold emailing tools and CRM’s?
Right now, no, but we’ve definitely had folks ask about showing email addresses or other contact information directly, so a third-party integration might be an interesting way to offer that without stepping on PII/privacy law toes. We’ll have to see how it plays out as feature requests come in and our priorities shift.
One of my favorite features is the Hidden Gems filtering option. It really is a genius idea. I currently see it only available for social media, but not for websites and Podcasts. Will it be included in the forthcoming updates? It might give a lot of exposure to small and medium traffic websites, which quite surprisingly have the best content.
Yes! We love it, too, and we want to extend it as well. We’re looking for good ways to do that, but it’s certainly on the product radar 🙂 Glad you found that feature and appreciated it -- one of my favorites as well.
There is a lot of opportunity for advertising here. Once SparkToro gains a significant user base, companies or influencers would be happily willing to pay considerable advertising dollars to be listed on the top of search results. Would you consider it as an option ever or will SparkToro always be an ad-free product?
It’s very hard to envision a future where that would be of interest to us. We’d strongly prefer to keep the results pure, and make the freemium model how we earn revenue work vs. advertising that makes the results less useful.
SparkToro went through a funding process that is one of its kind. It is neither bootstrapped nor the traditional model of startup funding. You even open-sourced the entire documentation of the whole process which is unprecedented in the startup scene. What was the initial spark for the idea of such a funding process and what would be your advice if an aspiring early-stage SaaS founder wants to raise funds copying that model?
We wrote in detail about that process and the thinking behind it here: https://sparktoro.com/blog/raised-a-very-unusual-round-of-funding-were-open-sourcing-our-docs/, but long story short, we wanted exactly what you describe -- a way to raise money that would give us an extended timeline to build and test prior to launch, without the requirements of growth at all costs.
Our goal was to be generous to everyone - employees (if we have them in the future), customers, investors, and founders - and this structure, while it required a bit of creativity, is fairly straightforward while still accomplishing that.
The list of initial investors that you put out had some amazing people, some of whom I personally admire a lot, including Dharmesh of HubSpot and Chris Savage of Wistia. Was the process just about a few back & forth emails or you had detailed discussion with every one of them about what you want SparkToro to be and your vision for it?
Many folks were, generously, on board with just a single email exchange. Others I spent more time with over the phone, on email, and in a couple of cases walking through our slide deck. You can actually see a sample of what that email outreach looked like in the blog post about our funding:
How would you rate the overall experience of the past 2 years since you left Moz and started with SparkToro? Have things gone to plan?
Covid-19 certainly threw us off course, as I suspect it has for many folks (professionally and personally). But all things considered, it’s been a shockingly smooth experience. We had some ups and downs figuring out the development and testing process, and a few times where I worried about how well the product might be received, but overall, compared to my journey with Moz (which was incredibly rocky and fraught with the pain of trying things for the first time and, often, failing), SparkToro’s been a relative breeze.
I think that’s part of the power of doing something for the second time. You learn so much from your early mistakes, especially when they cause you pain, that you can’t help but learn, grow, and improve that next time around.
My personal observation when it comes to the product itself and it’s pricing model. When someone uses it and gets the data they need, what is the incentive to keep using it on a subscription basis. Does the database gets updated massively month over month? I believe that is the reason you have a weekly plan, but doesn’t that make it very difficult to get an idea of actual MRR and calculate growth?
Funny enough, this is an intentional part of the product’s design! We know there’s a lot of people who need this data maybe only once or twice a year… And we’re OK with that. In fact, we want to support it. SparkToro doesn’t need to have every customer use recurring billing and get charged every month. If folks find they need us heavily, that’s great, but if they only need the data on occasion, we’re happy to measure our lifetime value in decades and satisfied customers vs. monthly churn rate. Sure is nice not having venture, eh? 🙂
As for speed, SparkToro’s data updates every ~120 days completely, which means about ~500k-1M accounts refresh each day. But, since few profiles completely change their behavior over even a quarter (with rare exceptions like the viral crisis currently shaking the world), there’s a lot of similarity in results over even the course of 6-9 months.
Over time, we do plan to introduce additional tracking features to the product that may make it even more useful for folks who want to understand incremental changes to an audience, get new recommendations for their lists, or be updated when a source of influence starts to gain traction with a group.
Is the team size still at two of just yourself and Casey? Are there any plans to hire after the launch?
Yup! Just the two of us, with no immediate plans to hire in the near future, though that might change depending on what adoption and growth look like after launch.
What is the major shift in the SaaS industry in your perspective in the past 5 years and how you see it evolve over the next decade?
There are two big ones - 1) it’s much, much cheaper and easier to start a SaaS business and run it than 5 years ago (on every vector). 2) companies and organizations of every kind are far more accustomed to and likely to buy software tools via subscription than ever before.
In the next decade, I expect both trends to continue, though I think we’ll see more organizations get savvier and pickier about how they choose subscription products and we’ll see more SaaS companies start to care less exclusively about retention and churn and look more toward lifetime value over the long haul.
Your favorite SaaS tool apart from SparkToro and why?
Free? I’d say Pocket. It’s an invaluable app for me to save what I want to read later and discover amazing content.
Paid? I love Wistia. As someone who’s constantly creating video content, they just make it so easy and straightforward it’s a pleasure to use their product (and I know a lot of folks there, which makes supporting them feel great, too).
Your favorite SaaS company when it comes to growth & marketing strategies that you would be happy to implement for SparkToro?
I’ve always been very impressed with Profitwell’s growth tactics. They’re authentic, very email and content-driven, truly helpful… I hope SparkToro can emulate them in those ways.
AWS or Azure or GCP? Which you used for SparkToro and which would you choose if you are starting a SaaS company today and why? Also, I have to ask you this as you have followed Google more than any of us ever could. Will GCP ever get as big as AWS or even closer to it? What Google must do to get there?
We’re primarily using AWS but have considered the others (and DigitalOcean). I’m not a developer, so this question’s likely better for Casey, but my $0.02 on Google is that Google has to find a way to not play an incremental one-upping game with Amazon, but rather offer something massively unique or better (price, speed, quality, something else) to truly differentiate.
Thanks so much, Rand, for taking the time amid your busy schedule so close to the launch of SparkToro. There were so many interesting points to take inspiration from and learn. Much appreciated and all the very best for SparkToro's launch.
Thanks for having me, Yusuff.