Rand Fishkin, co-founder of MOZ and one of the most recognized figures in the digital marketing world, discusses the problem with growth hacking, talks about the dilemma of selling a service vs. selling a product, and introduces us to his recent enterprise, SparkToro.
Rand Fishkin is without a doubt one of the most recognized figures in the world of online marketing. His career began after dropping out of the University of Washington in 2000 when he joined his mother’s small business marketing firm as a web designer.
In 2004, he created the SEOmoz blog, which, over the next decade, became the world’s most popular community and content resource for search marketers. In 2007, Rand became CEO of SEOmoz, Inc (now called Moz), the software company he co-founded with his mom based on the blog’s success.
Over 7 years as CEO, Rand grew Moz from 7 employees to 134, revenues from $800K to $29.3mm, and traffic from 1 to 30mm annual visitors. He raised two rounds of funding, led three acquisitions, and, in 2013, re-branded the company from SEOmoz to Moz, shifting focus from exclusively SEO tools to broader web marketing software.
Rand stepped down as CEO in February of 2014 during a rough bout with depression and left the company 4 years later. He remains chairman of Moz’s board.
Rand may be best known for his popular blogs and regular Whiteboard Friday series, watched by tens of thousands of marketers each week. Rand is also a frequent keynote speaker at marketing conferences around the world,
In 2018, Rand founded SparkToro (an under-development software company focused on audience and influencer intelligence) and published his book, Lost and Founder: A Painfully Honest Field Guide to the Startup World.
Transparency Can Help You to Stand out in Your Field (02:00-03:07)
Transparency is a core value Rand extensively discusses in his book, “Lost and Founder,” and also a strategy that he applied during his years at MOZ. What is the significance of transparency when scaling your business?
“It’s an interesting question, Matan. I think one of the challenges to understand with transparency is that it was a core value for me, but that doesn’t mean it’s the right core value for everyone. I think that there are many companies, many founders who don’t value transparency, who, in fact, value secrecy.
Probably the most famous of these is Apple, which is one of the most successful companies of all time, and so I wouldn’t necessarily say that transparency is what you should do or what every founder should do, but if you believe strongly in transparency, if that’s something that you want in your company, then I think it can be great to adopt it as a value and to try and live that out. It certainly helps with things like recruiting and marketing and being seen as unique in your field. It’s an unusual trait, at least when people are truly fully transparent about the things that most other people hide, keep secret. I think that c. Yeah. But I don’t know about everyone doing it.”
I think there’s a close correlation. Elementor is an open-source platform, and we’re part of WordPress, which is also open source and GPL, and I think there is a connection here with the idea of transparency having an open garden instead of a closed garden, so what do you think about this trend in general of transparency?
“Part of me worries a little bit that when it becomes trendy, it is not a real core value that people essentially use transparency to mean, ‘Well, I want to share things that’ll have a positive impact on my marketing.’ That’s not real transparency, right? Transparency is essentially being open and honest about things that other people usually try and hide, and revealing the uncomfortable, sometimes shameful truths behind what’s really going on in a business or in your life or your field, and I think it’s not for everyone, certainly, but it can be very … What do I want to say? It can be very positive for some companies, and it can certainly be positive if you are someone who believes in that and who doesn’t feel comfortable trying to cover that stuff up.”
Team Wants to Scale (6:13-9:04)
One of the things we found interesting in the book was the challenge of scaling as a company in terms of having employees or individual contributors become managers, and actually changing the way Rand treats his employees as opposed to managers, and trying to level things up. We asked Rand to share his thoughts on this dilemma:
“Essentially, I think the problem, and this happens to tons of companies who find themselves trying to scale, is that they quickly realize that their team is looking for growth in terms of title and responsibility, and unfortunately, I’m not sure if this is true worldwide, but especially here in the United States, a big part of growing your career is getting a more and more impressive title and managing more people.
That’s what elevates you to the next perceived level of importance or success in your career, and there are folks who, often in engineering, I think that’s one area where it’s less exclusively prominent, but in engineering, there will be tracks for individual contributors, people who are great programmers, great doers of work, but not necessarily great managers of people, and I think these are two separate skills, and the problem is that as your company scales up, people who are good at doing the work suddenly want to become managers of people who do the work, and that is a completely different skillset, and creates a lot of friction and tension.
And so my advice to folks in the book, and what we ended up doing at Moz to try and assuage this problem, was to build separate tracks throughout the company where people could advance in their skills, their responsibility, their level of input, their title, their salary, their stock options, without having to manage people, that you could essentially be … You could work on the customer success team. You could work on the finance team. You could work on the marketing team. You could work in engineering or product or design, and advance your career and your title, your salary, your options, all those kinds of things without necessarily having people report to you, and that those tracks, the management, and the IC track would look similar and have a similar level of input. I don’t think that stuck around as much after I left Moz, but it was certainly very, very helpful for some of those challenging growth years.”
Selling a Service or a Product? (13:27-16:24)
Rand talks about the dilemma of business, whether it should sell a service or a product. We asked him to share his insights on the subject:
“Yeah. The simplest way to think of it is a product company makes a product, either software or physical goods, and sells many of the same things over and over. A services company tends to do consulting or offer their time in exchange for money. They usually have hourly rates or project-based rates, and investors don’t really like services companies, and as a result, the tech field as a whole looks down on them or treats them as second class entrepreneurs, which is ridiculous because most services companies have a higher survival odds. They often make their founders more money, and they are often great places to work that feature sometimes less of the abusiveness that tech product companies have been associated with, especially the bigger ones.
But that’s not to say that everything about them is perfect, but I think that they just get an unfair reputation for being uninteresting companies, exclusively because they’re uninteresting to venture funds, and that’s a silly way to look at things. If you’re an entrepreneur or if you’re someone who’s looking at joining a company, you don’t really care whether venture investors are going to make their billions. You care about whether you’re going to have a good job and a good life and a good chance of success and a good paycheck and profitable business and security, and those things can all be achieved, often with higher odds with services versus products business.”
That makes sense. I think people looking for a career move also need to listen to your story and get some tips there.
“Yeah. I think that the key is just not to be biased by biased perspectives. I don’t really have a horse in this race. I have no reason to suggest that you should go with a services business or you should go with a product business, but a lot of the people who talk about product versus services do have a horse in that race, and they have an agenda, they have a reason that they [inaudible 00:16:18] and I think, unfortunately, that’s biased the entrepreneurship world in an unhealthy way.”
The Problem With Growth Hack (18:14-19:46)
Another topic Rand talks about is the Silicon Valley Growth-Hack Myth, and the difference between growth hack and the flywheel idea. What makes a growth hack an arguable strategy according to him?
“I think growth hacking has a real short term-ism problem, where it’s essentially looking for things that might temporarily work, but often have legal, ethical, and/or problematic externalities associated, and I think this is why growth hacking is embraced at a few [inaudible] more for, ‘Oh, well, actually, we’re looking for growth marketing, not growth hacking.
We don’t want to find temporary short term hack that works for a little while, which was all the rage between maybe four and seven years ago, and instead we want to find sustainable long term strategies that keep building on each other, and the flywheel concept is just that, that essentially it takes a lot of energy to get that flywheel moving, but as you continue to contribute marketing efforts toward it, each revolution of the flywheel gets easier and easier, and you build up some inertia around your marketing practice, which can have very sustainable, long term, healthy impacts on a business.”
What Is SparkToro? (20:31-24:13)
Rand’s latest enterprise is SparkToro. What is it all about?
“So the fundamental idea behind SparkToro is that it’s a software tool. It hasn’t launched yet. It’s still in private beta, but we’re hoping to launch some time in the next few months, and the concept behind it is that we want to help marketers find the sources of influence for their audience, so that they can go target that audience in the places that actually reach them.
We want to be able to tell you, ‘Hey, these are the podcasts that your audience is listening to. These are the YouTube channels that they subscribe to. Here are the people and publications they follow on social. Here are the websites that they visit. Here are the events and conferences that they go to. Here are characteristics that that audience has from their self-described bios and the words and phrases that they use in their content,’ those kinds of things so that you can get very quickly, at a glance looks at, ‘Hey, this is what my online audience looks like. This is how they behave, this is who and what they pay attention to and follow,’ and this practice of getting audience intelligence at your fingertips is pretty new.
Historically, you would’ve had to run large scale, expensive, long lead time surveys in order to get this kind of information, and we can deliver it in, whatever, three to five seconds, however long a search takes, right in the interface, and that’s just from crawling all of these tens of millions of profiles on the web and aggregating all the data together. And so I’m [inaudible] these days.”
That’s interesting. So actually crawling the social platforms and seeing how people are, how much they’re active on them, and what conferences they attended on Meetup, these sort of data?
“Yeah. Those kinds of things. Yeah. We basically look at both the social web and the broader web, so we might crawl profiles, yeah, on Meetup, on LinkedIn, on Reddit and YouTube and Twitter and Facebook and Instagram, whatever public profiles are available, and then we aggregate those together to create an individual profile, and then we don’t show the personally identifiable information, we don’t care about name or address or whatever, but we do want to be able to say, ‘Oh, okay. These people are whatever, work in health insurance,’ or, ‘These people are interested in gardening,’ or, ‘These people are interested in material sciences,’ or, ‘These people are interested in chemical engineering,’ or, ‘They describe themselves … ‘ And then we can show you a bunch of data about whatever, 30,000 data scientists that we have in our database aggregated together, and show you, ‘Oh, well, they follow these people, they subscribe to these channels, they use these words and phrases in their bio,’ like that at a glance audience intelligence data.”