SparkToro Update: How We Hit $1.5M ARR And 1,500+ Paying Customers in Two Years

Rand Fishkin

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Published: December 30th, 2022

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Rand Fishkin

Founder, SparkToro

Founders

Employees

SparkToro

sparktoro.com

from Seattle, WA, USA

started March 2018

Founders

Employees

Discover what tools recommends to grow your business!

Discover what books Rand recommends to grow your business!

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Want more updates on SparkToro? Check out these stories:

1. This Moz Co-Founder Created An Online Tool That Reached $75K MRR In Just 6 Months (2021) ➜

This is a follow up story for SparkToro. If you're interested in reading how they got started, published about 3 years ago, check it out here.

Hello again! Remind us who you are and what business you started.

Hi! I’m Rand Fishkin, co-founder, and CEO of SparkToro, makers of especially fine audience research software. Our product is a specialized kind of search engine: you search for an online audience, e.g. people who frequently talk about cocktails, people whose profile includes the word “bartender,” or folks who frequently visit the website: punchdrink.com and SparkToro give you loads of demographic and behavioral information about that group.

Most of our customers are marketers, either at agencies or in-house, and they use our product to better understand where and how to effectively reach their target audiences.

If you’re selling a new Italian amaro or trying to break into the world of no-alcohol spirits, you might want to know which podcasts bartenders listen to, what websites they visit, which social accounts they follow, what YouTube channels they subscribe to, etc. so you can do better targeting with your PR, content, outreach, and advertising activities.

We think it sucks that big tech monopolies (Google, Apple, Amazon, and Facebook) have this data, but refuse to share it (that obfuscation helps maximize their ad revenue).

Our product launched in 2020, and in our first two years, we’ve grown to 1,500+ paying subscribers and >$1.5M ARR with a team of just three people.

Rand, Amanda, (Geraldine photobombing), and Casey

Tell us about what you’ve been up to. Has the business been growing?

SparkToro adds (on average) more than 200 new, free users every day. They rarely find us through Google search (which surprises many marketers that have followed me for the years I ran Moz), but instead come to us through a variety of influential sources: blogs, newsletters, podcasts, webinars, social accounts, and more who recommend our product to others and help amplify our brand.

When looking at SparkToro’s visitor analytics, you’ll see that almost all of our search traffic is for our brand name or the name of our free tools. You won’t see any advertising or paid media either – It’s not that we don’t believe these channels don’t work, but that we don’t think they work for us.

Investing in marketing here at SparkToro means three things:

Brand
Content
Other People’s Megaphones (aka PR, but rarely in the traditional media sense)

We work hard to position ourselves as an unusual, delightful, helpful, and trustworthy brand. Our mission, vision, and core values are weird, especially for a B2B SaaS company.

We love that weirdness. And, because we’re not venture-backed, we can afford to do things that are more about bringing joy to our customers, community, and ourselves vs. the constant pursuit of revenue growth at all costs.

As for how our PR/get-covered-by-sources-of-influence strategy is going: this Google News search tells a bit of the story. We get dozens of pieces about our brand, company, product, and data published in a vast variety of outlets every week, often with very little work on our part. So… Pretty darn well!

What have been your biggest challenges in the last year?

One of our biggest challenges is dealing with Twitter’s ownership change.

That’s on two fronts:

One - Twitter is a primary connector network for us. SparkToro gathers data from 12 different social networks like YouTube, Facebook, Reddit, Instagram, LinkedIn, and others. But, Twitter functions to help us connect identities across platforms (because people who have active Twitter accounts almost always connect them to their other social platforms or websites). Twitter also has a lot of rich, public sharing and engagement activity – posts with text, links, following/follower info, etc.

As Twitter’s new owner has been extremely erratic and driven a lot of changing behaviors on the platform and reliability questions with his staffing decisions, we’ve felt the need to protect our product by quickly branching out into other options.

That meant a bit of scrambling, brainstorming, and a lot of stressful days trying to work out how and how fast we can build redundancy. Thankfully, we already have a lot of data from other places, but replicating what Twitter provides will be a challenge over the next couple of years.

Two- from a marketing perspective, Twitter’s been a phenomenal network for us to spread the word about SparkToro and build professional connections. But, with the new ownership, the platform’s tenor has shifted to something more like the ‘vibe’ of the 2016 US election.

Twitter’s less of a professional and knowledge network, and more of a place for political anger, identity-based conflict, hate speech, and doomscrolling. These changes, and a prediction that things will get worse under the new ownership (especially as his financial position becomes more tenuous with the debt payments and Twitter’s fleeing advertisers), mean we’re trying to find new places to engage our audience vs. focusing on Twitter.

I’ve moved most of my activity to Mastodon and LinkedIn but the loss of Twitter is an acute one.

What have been your biggest lessons learned in the last year?

The data you can find on the public Internet if assembled in the right ways, can provide incredibly high-quality, useful research.

One of the biggest drivers of success for my previous company (Moz, which made SEO software) was the massive growth of search and search marketing during the company’s formative years. That “rising tide” lifted the ship of Moz (and many software makers who followed it), but it hasn’t been present for SparkToro. The shift to “channels and sources of influence beyond Big Tech” has been a tough road – it’s absolutely worthwhile, and I believe in what we offer, but there’s no similar trend for us to ride.

I think in many ways we’re still looking for the singular message and positioning (i.e. SparkToro is X for Y) that will let the company reach its full potential. The product delights and helps a lot of folks, but the overwhelming majority of marketers who’d benefit from what it offers have no idea it exists, and I’d guess that 95% of people who’ve tried it don’t fully grok how to apply the data, or quite where/why it’s useful in their work.

That’s on us to fix – lots of opportunity, but also lots of pressure.

What’s in the plans for the upcoming year, and the next 5 years?

We had hoped to launch in German this year, but after spending a good few months crawling and indexing German profiles and posts, found that, unlike English, there just aren’t enough public accounts with publicly observable activity in German to make the product work. German speakers online are much more likely to have private profiles on their networks, and they post far less often, share links less often, and participate in public conversations less often than their English-speaking counterparts.

Furthermore, many German accounts use English (or other languages) rather than German when they do participate in places like LinkedIn, Twitter, Reddit, and YouTube. All of this means that the project was, generally, a failure. We did the work, found it wouldn’t provide value, and had to shut it down, disappointing a lot of our German-speaking fans.

We’re hoping to try again with Spanish in 2023/24, but it’s a hard-won lesson for a team of just three folks who don’t have much spare bandwidth.

As far as other plans for the future, we’ve got lots of product features and improvements planned (the aforementioned broadening of our networks and connections, alongside many others), but I think listing a bunch of upcoming features is more self-promotional than it is helpful.

Long-term, we want marketers and entrepreneurs to be able to use SparkToro to gain rapid, deep insight into any online audience’s demographics and behaviors so they can do better marketing, and build better products. That’s a pretty expansive vision for such a tiny company, but I know it’s possible!

The data you can find on the public Internet, if assembled in the right ways, can provide incredibly high-quality, useful research. It’s up to us to execute that vision and to make great decisions about how to spend our time getting there.

What’s the best thing you read in the last year?

I loved Liz & Mollie’s new book: Big Feelings, about how to be OK when things are not OK.

They really bring to life a lot of how modernity feels – so many things in the world are wrong, unfair, and broken, and yet letting these permeate your life and your psyche has an incredibly negative impact on the kinds of lives we want to lead.

Resolving this conflict, or at least having the tools to handle it, is a superpower, and that’s what they’re giving folks with this book.

Advice for other entrepreneurs who might be struggling to grow their business?

This is way too broad a question! Seriously.

There are no two businesses and no two entrepreneurs for whom the same advice will be right. That’s because so much of what makes an entrepreneur successful (or not) is whether they apply their unique talents to problems in ways that bring them energy, fulfillment, and leverage what makes them great. Following generic advice from someone like me (or any of the millions of “get rich quick” style gurus out there) is folly.

All those caveats aside, I will say this:

If you can figure out who your most valuable customers are
And then figure out what they read, watch, talk about, follow, listen to, consume, and attend
And then figure out how you can be interesting, useful, and on the radar of all those sources of influence your audience consumes
You’ll have a huge competitive advantage with marketing (especially over those who have to spend $0.99 of every $1 of margin on advertising with the Big Tech platforms)