A Product Market Fit Show | Startup Podcast for Founders
00:00:00 · Pablo Srugo
[00:00:00] S0: I had an awesome conversation with , uh, Rand Fishkin, the founder of Moz , and now the founder of SparkToro and Snack Bar Studio. But aside from being a founder, Rand is also an author. He wrote a book called Lost and Founder. This was like six years ago. And I remember reading this book. It's, it's a rare, rare book in the startup world, because he's super transparent about what it was like to be the founder and CEO of a venture-backed startup. He goes through all the ins and outs and , uh, ultimately becomes kind of jaded, frankly, about vc, which is why his new company, spark Toro is totally different. It's just three employees. They do $2 million a year in revenue. They grow steadily year over year , and they're very profitable. And so on this show, we've mainly interviewed founders of unicorns that have gone on to be like billion dollar plus companies, which is certainly one path. The reality is venture capital is the path for maybe 5% or so of startups. Yeah, if you wanna build the next Amazon, you probably have to go down the VC route. But if you wanna make like, even a few million dollars a year, in fact, if you wanna make $10 million through, let's say, an exit event, you actually are more likely to get there through a bootstrapped company. And in this episode, we go really, really deep on what it's like to start and build a bootstrapped profitable company. And why you don't really need VCs like me to succeed. Welcome to the product Market Fit Show, brought to you by Mistrial , a seat stage firm based in Canada. I'm Pablo, I'm a founder turned vc. My goal is to help early stage founders, like you find product market fit, You cost me a lot of money. And I'll tell you exactly how it's because I have a really close friend who, so I'm, I'm on the venture side now, and I have a really close friend who I think actually was the one who referred your book to me. And he was like, man, I read this book. Like this is what I'm gonna do. Like, screw the VC stuff, whatever. And then he like totally hid it like his company just, and I was like, please, let me invest, please. Like , no , we just don't want , we just don't , bootstrap, bootstrap ended up raising, but once they were like, you know, 10 m 10 million plus r sort of thing. And so anyways, I think I would've gone in if it wasn't for your book , dude. <laugh>, <laugh> .
00:02:11 · Rand Fishkin
[00:02:11] S1: I mean, I do think, I think there's something wonderful for founders about sort of recapturing some of the power dynamic in an investor environment, right? Because capital has just a hundred to one , all the power in, in every conversation, in every part of society and, and politics and economics. And being able to, you know, give labor back, like even a shred of that is something I'd be, I'd be really proud to say <laugh> , you know, that, that, that my career could have helped with. And that's not, I don't , I don't think that people who are in these companies are , these, these investment firms are bad people. I don't think they have bad intent. But I think their incentive structure is such that you're going to, by your very nature, right, by, by your , even your existence, harm a lot of small and startup companies in exchange for a very small number of winners. And that's not an environment I'm excited to create or participate in. Uh , you know, my, my whole goal for the startup world is how do we make more companies that are profitable long-term , even if they stay very small and they survive. And, and eventually maybe they become something bigger than that, or maybe they don't and they're just, you know, wonderful experiences for the few people who work there and the customers that they've got and the environment that they're in. I think a diverse economy is far preferable to a concentrated wealth and power economy. And obviously, you know, the United States has been moving in the opposite direction for a long time. That's, that's pretty concerning. But
00:03:40 · Pablo Srugo
[00:03:40] S0: I think, you know, you mentioned like, it's not about good versus evil, and I think that's totally right. Like, I think what you're really doing is opening the eyes, because the problems really tend to happen when somebody goes into it with their eyes not wide open and not really understanding like what they've gotten themselves into it. And even myself, like when I started my last startup gym track , I didn't know, I mean, you just don't know what you don't know, right? And , and part of it, like, you have to go through it , take the punches to the face, but obviously books like yours , uh, and just content that is open and like actually talks through like the ups and the downs helps. It can help a lot and on both sides, right? Because frankly, like, and I've said this to founders, like, if you don't wanna go for the big, like the big, big outcome and forego everything else, maybe you don't want to take vvc or you certainly don't wanna take too much vc. 'cause it'll be , it is bad for everybody <laugh> , right? Like, you just, you wanna only do it when it's fully aligned. Yeah,
00:04:33 · Rand Fishkin, Pablo Srugo
[00:04:33] S1: Absolutely. And I, I think that there's a big psychological and sort of cultural challenge around this, which is, I , I don't think any single investor or media personality or founder is responsible for this, but overall, the last 25 years have definitely created an environment where almost every founder feels like, if I'm not raising lots of money and trying to become the billion dollar unicorn, then I am not as good of an entrepreneur. I'm not as impressive of a person. I'm not as worthy of professional sort of admiration and, and happiness and feeling accomplished and feeling like I'm enough. That is a serious problem, and it is dumb as hell. <laugh>. Right. [00:05:22] S0: <laugh>, maybe let's start with , uh, with kind of the origin story of Moz . Uh, you know, you were kind of running, you were in the SEO game already. You were doing more of a services type business. How did you transition that into what ultimately became MAs kind of the venture backed startup that, that became very well known , attracted a lot of venture capital , uh, and went on to be acquired. Let's
00:05:22 · Pablo Srugo, Rand Fishkin
[00:05:22] S0: <laugh>, maybe let's start with , uh, with kind of the origin story of Moz . Uh, you know, you were kind of running, you were in the SEO game already. You were doing more of a services type business. How did you transition that into what ultimately became MAs kind of the venture backed startup that, that became very well known , attracted a lot of venture capital , uh, and went on to be acquired. Let's [00:05:43] S1: See, I dropped outta college in 2001 and started building websites, essentially doing, doing web design for local small Seattle businesses , uh, alongside my mom, Jillian, who had been running a small business marketing and advertising consultancy, you know, sort of one woman shop here in Seattle for 20 years before that. So interestingly, you know, if you look at the, the kind of like foundation of, of what became Moz , uh, the company started in 1981. <laugh> , technically right? <laugh> . Um , but , uh, so that, that business kind of transitioned into a web design development business, which was failing miserably, racked up a ton of debt, did not do well, and then we couldn't pay our SEO subcontractors. And so we had a conversation, it was like, Rand , do you need to learn to do SEO and do that? 'cause we really need that money. And we promised it to them, but we can't afford to pay these, you know, these contractors. So dove into SEO and found it extremely frustrating , um, and very secretive, you know, that both the industry and the search engines at the time, what year [00:06:49] S0: Was this? [00:06:51] S1: 2000 2, 3, 4 ?
00:06:51 · Rand Fishkin, Pablo Srugo
[00:06:51] S1: 2000 2, 3, 4 ? [00:06:54] S0: Yeah . Okay. Really , [00:06:56] S1: Um , around that, around that era. So, you know, Google was the most popular search engine by oh four, but MSN , uh, Lycos , Salta , Vista info, c cobot , MSN search, you know , uh, ask Jeeves , like they were all still around. And so, you know, trying to, trying to do all this stuff. I think, in fact, one of the big catalysts for me, trying to kinda reverse engineer and publicize more about how search engines worked and start this website at the time called SEO Moz, I think that started in 2003, was my frustration with the fact that I had, I had gotten a lot of our clients ranking on most of the other search engines, Yahoo and MSN , and Ask , but not Google. Huh . And I was like, what is Google doing? Something's, something's weird, something's different, something's wrong. They don't, you know, they don't like the same things. They seem to have some, some other algorithm at play. [00:07:46] S0: Was the other stuff just, just, and this is kind of historical at this point, but was it just like keyword density? Like I remember there were like keyword clouds and <laugh> just weird things back then. Yeah .