This Moz Co-Founder Created An Online Tool That Reached $75K MRR In Just 6 Months
Hello! Who are you and what business did you start?.🔗
Howdy! I’m Rand Fishkin, co-founder, and CEO of SparkToro.
SparkToro makes audience research software, which is just a fancy way of saying we crawl tens of millions of public social and web profiles, anonymize, aggregate them, and make them searchable.
So, if you’re a marketer who needs to know which podcasts architects in Los Angeles listen-to, or a product researcher seeking to understand the demographics of science educators in Canada, SparkToro shortens your research time from months to seconds.
We started the company in 2018, raised a very unique round of funding, created open-sourced docs anyone can use and spent 18 months building this somewhat risky idea. When we finally launched in May 2020, we were pretty nervous the pandemic might sink our business, but thanks to high demand for this new concept, we turned the corner to profitability just six months later, and are now ~$75K in MRR.
What's your backstory and how did you come up with the idea?🔗
A long time ago (2001) I dropped out of college to start working with my mom, Gillian, on the startup that would become Moz. That business was in the world of SEO software, helping websites earn rankings and traffic from Google. But in the waning years of my tenure there, I realized that most customer demand doesn’t start on a Google search -- it ends there.
Work doesn’t have to dominate your life.
The obvious next question is: where does demand start?! Those answers (and there are many) are what inspired us to create SparkToro.
We wanted to solve the problem of discovering what, where, and how any online audience pays attention: what YouTube channels they subscribe to, what podcasts they listen to, what social accounts they follow, what content they consume (and where), what websites they visit, what events they attend -- all of it! Because it’s in those niche publications and sources of influence that people get inspired to take action. From teenagers finding new video games they want to play to CEOs learning about new types of revenue-based loans for their subscription businesses, sources of influence are usually the driving force.
Casey and I had worked together previously at Moz, and then on Inbound.org (a Hubspot Labs project). He and his family moved back to Seattle (where I live) in 2017, and we’d gotten together for a few coffees and meals, eventually determining that it would be exciting to start a business together. We’d both worked in marketing software for a long time, had experience building things from scratch, and knew we had a good working relationship.
I left Moz in February of 2018, took almost a full 12 hours off, and then started SparkToro the next day. Part of that was my desire to get back into entrepreneurship, but a bigger part was my and my wife’s financial situation. I needed to get a salary, healthcare, etc. ASAP. Once I secured our unique funding round ($1.3M from 36 angel investors), Casey left his job and joined me full time. I did not try to do that, so can't speak to how difficult it might have been. That said, it's very unusual for individual angels not to socialize risk around like this, so I'd suspect it would have been ludicrously hard.
Throughout 2018 and 2019, we validated the market through surveys, interviews, demos of manually collected data, and a rough alpha version. We then launched three beta cohorts, learning, and refining from each one. When we finally launched in 2020, we had a very solid product and a good sense that real demand for it existed.
Take us through the process of designing, prototyping, and manufacturing your first product.🔗
Rand built an audience. Casey wrote code. It sounds simple but wasn’t much more than that. Sure, we did things like secure AWS credits through Amazon’s startup program, and validated a lot of our product intuition through surveys, interviews, in-person talks at conferences, watching agencies and consultants do this work manually, etc.
In my opinion, it gives you a MUCH better shot at a great launch and speed to profitability/sustainability.
Funding docs anyone can use ( you can find them here).
But, at the end of the day, it was Casey building the product that we spec’d out together, Rand validating that with customers, and then reflecting those learnings to Casey so we could iterate and improve. I don’t like or believe in the MVP (minimally viable product) philosophy, especially not when you’re going to launch to a large audience. We knew we had to have something truly impressive on day one, or a lot of our target market would have a hard-to-ever-change, negative first impression.
Describe the process of launching the business.🔗
We’d built up ~18,000 folks on a waitlist for the SparkToro launch, starting in March 2018 and running through March 2020. That might seem like a long time, but it allowed us to secure funding, build an impressive product, validate it with our market, iterate on several versions, do a full UI redesign, and do all of this patiently, without sacrificing the quality of life.
When we launched, it was, sadly, at possibly the worst time to earn attention in 100 years. Covid was overwhelming the US and the world, and paying attention to a new marketing product was the first thing on no one’s mind. It’s a near-miracle that we managed to get even a few dozen early customers those first two months.
Our biggest lesson: launch when people are ready to pay attention! Unfortunately, we’d expended our bandwidth for waiting and felt compelled to get to market no matter the situation, but in nearly any other scenario, I’d have pushed for us to wait a month or two more.
Since launch, what has worked to attract and retain customers?🔗
Our most successful top-of-funnel marketing has come through what I’d call “influence marketing” (no “r”). That is, we found channels of influence -- podcasts, websites, social accounts, events, webinars, media publications, YouTube channels, etc. -- that already reached marketers and market researchers, and found creative ways to work together.
In some cases that meant doing a presentation for an online event or filming a video or recording a podcast together. In other cases, it meant getting an intro and showing them SparkToro, then hoping they’d amplify that to their audiences (many did, some didn’t, c’est la vie). And yes, the video/podcasts/etc was enough to get the mention (so we didn't need any incentives or payment).
We’re taking a very chill, very conservative approach to growth. We even call our daily cadence at SparkToro “Chill Work.”
As for retention, we haven’t invested much here yet. Our churn rates are quite high, which we don’t worry about too much because we generally believe that for many customers, SparkToro solves a problem they have every few months or couple of years and that when they need us, they’ll come back. That’s a very different philosophy to how most subscription products operate, but so far, it looks promising. We’ve had ~10% of customers subscribe more than once in the 15 months since going live.
How are you doing today and what does the future look like?🔗
SparkToro’s been profitable for 10 months, growing quickly in some months and more slowly in others. We’re taking a very chill, very conservative approach to growth, keeping expenses low, saying “no” to a lot of opportunities simply because we don’t want to be too overwhelmed, and trying to focus on making our current product the best and our current customers the happiest it/they can be.
There’s currently just three of us - myself (CEO, cofounder, responsible for lots of product, partnership, financial, and management strategy stuff), Casey Henry (responsible for everything technical with the product and website), and Amanda Natividad (responsible for most of our growth marketing and onboarding/product education initiatives). We’ve committed to working sane hours, with plenty of time for family, friends, TV shows, video games, and elaborate, home-cooked meals. In many ways, we’re living the Italian entrepreneurship dream (even though none of us are Italian) more than the American one.
Longer-term, we do have plans to add Spanish and German profiles to the product (and expand more into those regions) and to offer over-time tracking of audiences (which we hope may encourage greater retention and stickiness for those who need that service).
Through starting the business, have you learned anything particularly helpful or advantageous?🔗
Work doesn’t have to dominate your life. You don’t have to raise a traditional venture to build a great tech startup. You don’t need a big team to do amazing things. You can build a remarkable marketing engine even without Google or Facebook.
We’ve done all of those, and I wouldn’t do it any differently if I had it to do over again.
What platform/tools do you use for your business?🔗
We’re on Stripe for payments (not amazing in every way, but hard to beat for everything it does). We’re primarily on AWS for cloud, though considering other platforms depending on credits and opportunities. We use a combination of Mailchimp and Mailgun for email marketing (transactional on Mailgun b/c of costs and their API, most marketing on Mailchimp). And we use/love Wordpress as our CMS.
What have been the most influential books, podcasts, or other resources?🔗
The Zebras Fix What Unicorns Break article and subsequent Zebras Unite movement was hugely influential for us. Beyond that, I found April Dunford’s Obviously Awesome to be massive for us on the marketing front, especially since we focus so much on getting people to learn about our brand through existing, niche sources of influence.
Advice for other entrepreneurs who want to get started or are just starting out?🔗
I feel like I’ve covered so many of these already above, but to be cheeky, I’d suggest my book, Lost & Founder: A Painfully Honest Field Guide to the Startup World, which covers a lot of those “lessons learned” from my previous company and how that translated into doing things differently with SparkToro.
Where can we go to learn more?🔗
If you have any questions or comments, drop a comment below!
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