A Product Market Fit Show | Startup Podcast for Founders
00:25:09 · Rand Fishkin
[00:25:09] S1: Do, you know? So , um, at the two companies I run now, so SparkToro has three people, myself, Casey , our CTO, and Amanda, our VP marketing. And, you know, it's small. It's under $2 million , uh, a RR, but it's also very profitable. Extremely profitable. Very a beautiful business. And we have, we have tons of fun . You know, Pablo last night we did like our , we launched our like new version of SparkToro that we've been working on for a year. It's been, you know, relatively stressful process. And , and, but also during that time , uh, Amanda had her second kid and took like, you know, six months off and , uh, of parental leave, which is, which is, you know, that's like one third of all of our labor are gone. Right? Casey and I , uh, regularly still try and work 30 hour weeks, 32 hour weeks. Um, we take lots of vacations and time off for other things. I obviously run another company, right? So I'm busy doing that at, at snack bar , uh, snack Bar Studio. There's five of us, all founders. We , uh, all sort of work independently all over the globe. I probably spend only 10 hours a week on that business. Uh, and it is just an absolute joy. The team got together , um, at a farmhouse in, in on the border between Lazio and Umbria in , in Italy, Hmm . Uh , last month and had an outstanding time and ate at a bunch of fancy restaurants and, you know, cooked for each other. And <laugh> found out our game designer is like a pianist. And yeah, just, you know, a awesome stuff. And the quality of life that you can have with these kinds of businesses is so much better. And you, you know what, what's really beautiful to me is you are , um, doing work that I think really, really is about what you wanna do, who you wanna help, where you wanna direct your efforts.
00:27:03 · Pablo Srugo, Rand Fishkin
[00:27:03] S0: I gotta ask some questions on, 'cause I think that's, that's super interesting. First of all, like how much was like the whole base scan , 37 signals, like was that an inspiration for the way you're, you're kind of setting things up now, let's say it sparked Toro . [00:27:15] S1: Oh, interesting. You know, there was a time when I was sort of had a, had a very high opinion of those guys, I think like in the, the mid two thousands, [00:27:24] S0: Because I remember they put out a book called Rework. Yeah . I don't remember when I read it, but it was like this anti VC and anti like, really, which was like just, Hey, the debate is all over here. Like, here's this other thing we're doing, by the way. And it was working <laugh>. And so that was , uh, refreshing. I [00:27:38] S1: Would say for me it was a different one. There's a book called Small Giants. Okay. Um, and I read that book. It has a bunch of different , um, examples. I'd, I'd urge folks to check it out. I think it's a , a great sort of community. And, and it's, it's called, I think the subtitle is Companies That Choose Choose to Be Great instead of Big.
00:27:38 · Rand Fishkin, Pablo Srugo
[00:27:38] S1: Would say for me it was a different one. There's a book called Small Giants. Okay. Um, and I read that book. It has a bunch of different , um, examples. I'd, I'd urge folks to check it out. I think it's a , a great sort of community. And, and it's, it's called, I think the subtitle is Companies That Choose Choose to Be Great instead of Big. [00:27:56] S0: Well, I'll put that in the, in the show notes, I guess. So let , let's do some kind of quick, 'cause just want to dive into this, this SparkToro thing. I don't know how much you're comfortable sharing, but my quick math in the back of my head kind of says, okay, there's four of you. I don't know if you're all like, like, you know, 25% or three of you spark Toro . Is that right? Okay. So I'm thinking, okay, like you each draw, I don't know , 200, $300,000 salary and you still have like a million dollar in , in let's say net profit . 'cause I'm sure it's a super high gross margin business. Is that like roughly back the envelope about Right. [00:28:25] S1: It's, it's close. Yeah. Okay . That's pretty , pretty close to accurate. Um, good , uh, good guessing there. I so
00:28:25 · Rand Fishkin, Pablo Srugo
[00:28:25] S1: It's, it's close. Yeah. Okay . That's pretty , pretty close to accurate. Um, good , uh, good guessing there. I so [00:28:30] S0: That, you know, that sounds like appealing and you work 30, 30 to 40 hours a week. So like, that sounds appealing to I think anybody listening, here's the fir first question that comes to me is , uh, and you hear this like with the people i I work with, right? Which are founders that are into this VC game, it's like, man, if we don't hire more people, if we don't build faster, like we're not gonna compete. Like, how could you possibly compete with three people tomorrow? Somebody sees the opportunity, they raise 2 million bucks, they hire 10 15 when they crush you. I
00:28:52 · Rand Fishkin
[00:28:52] S1: Mean, this is, this is what's great. I remember , um, with Moz, like over the years, we'd look at competitors who got venture funding and we'd be like, oh no. Oh no. And then of course the venture odds came into play and it was like, oh, oh no. They, they all, they all die, right? Until one of 'em , SEMrush had success, but even they raised money very late, sort of after they had built a nearly Moz size business. Bootstrapping Ahrefs is entirely bootstrap, never fundraised . They're, they're well over a hundred million in revenue as well, right? So, I mean, the frustrating part of that, you know, that whole journey is like, oh my God, that ecosystem could support multiple hundred million dollar plus businesses and Moz just for , took its eye off the ball at the worst possible time. And , um, the , uh, but the reality I think with, with SparkToro is I don't even see anyone enter our field. And I think that's because everyone believes it's too small. No venture capitalist looks at Mo , uh, you know , looks at SparkToro and says, oh, that nice little $2 million a year business, let's go disrupt that field. Mm-Hmm . <affirmative> , they don't care. And that's the beautiful thing. This is the amazing part about businesses where you think you could, you know, very reasonably build a two to 20 or even $50 million a year business venture capital is gonna stay far away from them if they don't think there's a billion dollar opportunity, a hundred million dollar a year opportunity for, for hopefully a few companies in that sector, they're not gonna invest. And so those small markets are absolutely beautiful for entrepreneurs who are looking to build something that is great instead of big. And I , I would encourage founders who are looking at SparkToro style , you know , businesses or snack bar style businesses to, to pursue those sort of <inaudible> markets, right? Small to medium sized markets are absolutely outstanding. There's a hundred times more of them than there are in markets .
00:30:44 · Pablo Srugo
[00:30:44] S0: That's what I was gonna ask. You think there's a lot of these opportunities.