209: From Lost and Founder to Chill Work with Rand Fishkin

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As we evolve and get smarter and get older and get more experienced, we realize that we don't have anyone to keep up with and that no one really cares or compares us to someone else. I hear this. In fact the most I hear this from folks who are in the 60s plus that the status game that they thought they were playing in their 20s and 30s turned out to be less important than they thought in their 40s and 50s and faded entirely by their 60s and 70s. I hear that over and over.

This is your time. How can we earn twice as much in half the time with joy and ease while serving the highest good? That is our guiding question here at the Freetime Cafe, your home for heart based business. I'm your host Jenny Blake. Join me for conversations with authors, friends and fellow business owners as we explore ways to free your mind, time and team to do your best work. Now onto today's show.

Welcome back Free Timers Jenny Blake, here with someone I am so delighted to welcome to the Freetime Pod. We're Rand Fishkin. Rand is the co founder and CEO of SparkToro, makers of fine audience research software. He's dedicated his professional life to helping people do better marketing through his writing, videos, speaking and his amazing book Lost and A Painfully Honest Field Guide to the Startup World. When Rand's not working, he's usually cooking a fancy meal for the love of his life, author Geraldine Deruder. If you bribe him with great pasta or fancy cocktails, he'll pull back the curtain on big Tech's dark secrets. Rand, welcome to the show.

Thanks for having me. Jenny. Great to be here.

I've been aware of you for so long. I feel like you were early to the Internet. At least the Internet as we know it. And I just remember following your writing, following your career, probably heard you speak from afar at south by Southwest. And then I read Lost and Founder and I was so moved by how honest you were, as you say in the subtitle, painfully honest about your journey going through the venture capital world. And then I heard you on a podcast, Office Hours with Spencer Raskoff, talking about chill work. And that's when I thought, okay, enough is enough. I gotta reach out to Rand and invite him to free time and just hear your thoughts. So first, thank you so much again for being here. I appreciate it so much.

No, it's my pleasure. I'm thrilled to hear that Spencer's connection is what brought us together.

Yeah. So I want to get to talking about chill work, but before we do that, there is a chapter title in your book that I love. And I'm wondering, you don't even have to tell the story if you remember that far back, but if it continues to be true to this day. The chapter is called when you're in debt to the truth. The interest rate sucks. What did you mean by that? Or how does that show up for you today, if at all?

At the time that it was super relevant, it was related to the fact that my mom and I, who had started the company, my first startup, which was called Moz, made SEO software. Even before that it did SEO consulting, and before that, web design consulting. We had racked up an enormous amount of debt while the debt was a huge problem and was lurking over us. And eventually we were unable to make the minimum payments on that debt, which meant it skyrocketed and the interest rate balloons up. We had never told my dad, to whom my mom is actually still married, that we had any debt. And so, you know, my mom was racing home at 3pm or 3:30 or whatever to try and intercept the mail before my dad would get it. And whenever phone calls would come in at their house, she would run to the phone to make sure that it wasn't a debt collector calling. And she tried to convince my dad that they were getting tons of wrong numbers. All this stuff, it was insane jumping through all these hoops to try and hide something from a family member. And incredibly stressful too. Like I don't even know how she lived at that time. Apparently many years later, after my mom had exited the business and sold, she did a transaction with a local venture capital firm to get a lot of liquidity. She made a lot of money when she sold the shares. She sold them at a very good time in the company's history and in the history of VCs trying to acquire private stock. And I heard from my little brother. I don't really have a relationship with my dad, but I heard from my little brother that apparently he found out at some point and there was like just a week of screaming.

Oh man.

So I'm glad I wasn't around for.

That I can so relate to just that. When you're the one in the business driver's seat and there's a cash flow crunch, like one of the key features of being entrepreneurial in spirit, no matter the size of the business, is some level of hope that you can figure it out, you can fix it. And then that's also kind of one of the downsides, right? It's like, oh, well, you always think that the solution is just around the corner. So I'm not saying it's a good thing to hide things from our spouses and whatnot, but I can so relate to that thing of, shoot, we're in a cash flow crunch. We've solved every other problem. We'll solve our way out of this one. I just need to buy myself a little time. And I feel like just cash flow alone is probably one of the biggest challenges of running a business. I don't know if you're experiencing that now with SparkToro, but that seems like part of it.

We've been, knock on wood, extraordinarily lucky to not experience that. You know, I say extraordinarily lucky and also a combination of unwilling to take those kinds of risks. Very frankly, when I left Moz, which was not under great circumstances, unfortunately, I don't know how many of your listeners are interested in the ins and outs of venture capital. Hopefully very few, because it's not a great asset class, especially for entrepreneurs who care about freedom over growth at all costs with low odds of making it. But the reality was, when I left Moz, I did not have the funds to start SparkToro myself. And so I had to go raise money. My co founder, Kasey and I, we raised enough to make sure that we would not be in a cash crunch. And we only spent about maybe a little over half of it developing the product and sort of building all the back end of the data systems and structures and testing it with users and all that kind of stuff. And we didn't launch until we felt extremely confident that there was a market and that lots of people were already on our email list waiting to get this product, that the product itself was quite low cost to operate, but did some creative and unique things that we thought only we could do that gave us a competitive advantage. And, you know, the margins on software are quite good. We were familiar with subscription businesses. We had a lot of advantages going in that made sure, thank goodness, that cash has not been an issue for us. And we managed to get to profitability only six months after launch, despite the fact that we launched in April 2020, which was not exactly when people were paying attention to marketing software.

Wow, that is incredible. Six months in is like some of these companies take six years, you know, and that would be short. I mean, that's what I appreciated so much about Lost and Founder is you shedding light on some of the vicious cycles that ensue when you do take venture funding and how so much of it ends up being a compromise. And I just really appreciated you were so open. Like, was it hard at that time when you were writing that book? Was there part of you, I don't know that had some voice like, oh, don't burn bridges, Rand, or don't shoot yourself in the foot if you put all this out there, like, you'll never work in this industry again? This kind of thing.

I literally heard that from several VCs.

Oh, gosh.

Exactly. Exactly that, right? They were like, you'll never raise money again. No one in this town will fund you. That kind of thing. And I think they didn't realize was this was part of my intent. That was not a bridge I set on fire without the knowledge that it was going up in flames. It was intentional. And I mean, I'll say this as well, which is that I felt strongly that even though every venture capitalist out there would say VC is wrong for 99% of companies, it's marketed to pretty much 100% of early stage entrepreneurs in tech. Like, it's the primary thing that we all hear is the way, maybe not the only way, but close to the only way that's talked about with any sort of respect and popularity. I thought that was bs. I thought that was wrong. And I felt very passionately that part of my job over the next, hopefully 20, 30 years of my career, fingers crossed I get to play for that long, that I could maybe make a tiny dent and get a few more people thinking about, hey, I don't have the money to start a tech software business myself and I don't want to raise venture capital and build a business in that model and mindset. Is there anything in between? And that maybe by creating some examples of models in between and getting those funded and turning those into successful businesses, that people would point to them and say, hey, it can be done, maybe I could do this. And you know, when we took SparkToros funding, we actually open sourced our documents, our legal documents, our operating agreement, all that kind of stuff, our investor docs, so that other people could use them. And a few startups have used our docs to raise Money on their own. Tiny Seed, which is an investment fund out of Minneapolis, also uses SparkToro structure to raise money and invest in companies. My wife and I are small investors in that fund and it's gonna be a long journey, Jenny, but I hope we get there.

Well, that's awesome that you're open sourcing everything like that. And I believe you said part of it is that there's profit sharing of some kind, that it's an LLC with distribution where people have a little skin in the game too.

Yeah, that's exactly right. Amazing. The short version is 36 angel investors, like individuals, not funds, put between $25,000 and $100,000 each into SparkToro. We raised 1.3 million in total. And in fact, in a few days, we are about to pay back our investors. So everybody's getting their initial check back, right? So let's say you put $50,000 in just about five years ago. You'll get your $50,000 back this month, and then next year, two years from now, hopefully you'll get another check for a few thousand more dollars. And hopefully that continues for many, many years to come with the hope that people get two, three, four, five times their money back over the course of 10 or 15 years. And then if the business ever sells, which maybe someday it'll be acquired, you also get the proceeds from that sale.

I love it. One of the things you said to Spencer that made me laugh is that you hate the term lifestyle business. And you said venture is a lifestyle too. And I have never heard anybody put it that way because I feel like everybody derides the term lifestyle business. It's used in a sort of dismissive, offhand, judgmental way, like, oh, well, they're just running a lifestyle business. Pat, pat on the top of the head. Can you just expand on this a little bit? Because it's so good that what you're saying here is like venture is a lifestyle too. And for so many people that go that route, not a great one.

I mean, there's two things that infuriate me about it. One is it's used as a pejorative to demean people who prioritize things that are not making billionaires lots more money. If making billionaires millionaires too. I mean, most venture capitalists are people with.

Seven to nine figures of assets, right? So a few of them are sort of what we would call small scale millionaires. They only have a few million dollars personally in the bank. There's almost none who don't have at least a few million dollars in the bank. And then there are quite a few who are in the tens and a healthy number who are in the hundreds. And plenty of billionaires too, right? All the Sequoia guys and whatever. It's almost all dudes. I think fewer than 3% of all partners at venture capital firms in the United States are women. It's almost all white and Asian men. So there are almost no black or indigenous or other groups represented. The age ranges are not wide. Like it's. It's a pretty specific group. They're almost all coastal, right? They live on the coasts. So it's this tiny little group and they use this pejorative of lifestyle business to, yes, pat you on the head and say, oh, that's adorable. Look at you with your cute little business that's not serious and not real and won't make me any money. And therefore they need to demean it in order to stop people who might try and build venture businesses from going after venture and choosing to do these smaller scale, healthier, more sustainable, less extractive types of businesses instead. They need all of us in that ecosystem because the venture asset class fails 95% of the time.

That's what always perplexes me is I cannot imagine why we should build. I mean, right, Other than pure, cold, hard profit, you know, like that ends up in rockets being sent to outer space. Other than that, I don't understand why more business shouldn't be, quote, lifestyle business. That's why I was so compelled by the idea of chill work. Because what is the point of creating a business where you're just going to burn everybody out and churn and burn, as some cultures are, or even where the founder themselves is miserable and burnt out and unhealthy and then they get sick. Like just that entire way of doing business does not make sense to me. And I just feel like there's so much ego involved. And I guess some people genuinely feel connected. I'll try not to judge the entire space, but some people genuinely feel connected to an enormous mission and they feel the need to, like, make it as big as possible. But even still, I don't see why anybody's life should suffer in the process. Life and health. And yet it does.

So often, Jenny, whenever I get in my own head about this kind of stuff and say, like, God, these people are evil. Why are they doing this? All that kind of stuff, I try and come up with what is the strongest argument against my own. And I think the strongest argument, right. If I were a venture capitalist and I were on this call, I would say, hey, look, venture capital is wrong for almost every company. It's right for only a few. And you're right, Rand, that it's marketed to probably too many entrepreneurs. But if you're building a clean tech business, an energy business, a hardware business, a business in the pharmaceutical or medical world, the startup costs for these businesses are in the tens to hundreds of millions of dollars. There's no way to develop a new drug and get it through the FDA and all this kind of stuff and build a new kind of company and create competition in the pharma field. You know, biotech, life sciences, medical devices, a million different things. There's no way to do that without an asset class that very closely resembles Venture. If it's not Venture, like you can't go to your 35 angel investors and raise your $1.3 million and do that. And they're right. They're absolutely right. You can't do it. You do want Venture, right? If I were designing a modern economy for the United States or any other country, I'd say like, okay, yep, we probably do need Venture. We just don't need it in all the places that it's gotten into. And we don't need it to be treated like this sort of worshiped.

Right.

High status thing.

We'll be right back just after this.

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Okay, what do you think then the Steelman would be about chill work. Like what would be the voice of them saying why chill work is a bad idea and it's not going to work? And then I want to hear your response of why this is how you're orienting your new business.

This one I struggle a little bit more with the Steelman. I hear many people across all sorts of sectors of the US economy saying hard work is its own reward. And hard work is the only thing that is deserving of reward that human beings don't sort of deserve whatever it is. Love and care and a Social Security system, health care and to be treated well. They earn that. They'll say, many of these people will say, I earned my place in society, the economy, my hometown, my status, whatever, through the hard work that I did. And nobody else should be given free handouts or treated with respect if they have not also worked hard. I think that's a value system belief, right? It's a little bit like religion. It's very hard to argue against, right? You can say, hey, you believe that? I believe the opposite of that. I believe that every human being is deserving of not just basic human rights as we understand them, but of health care and of the ability to support themselves and their families and the ability to have a good life and the same amount of respect, no matter the amount of money that they earn or the amount of work that they do or don't do. And that's just a belief system, right? Those are two different beliefs. They're on opposite ends of a spectrum. I think in the United States we'd put one on the left of our political system and one on the right. But in many other countries, it's not even a left right for them. In Italy, for example, the left and the right sort of believe what the left believes in the US around economic care. That one is hard to steal, man. I think what is the best argument for what I've called chill work? And you've referred to here, and I'll give a brief definition, right? So chill work for us means essentially that we work a relatively small number of hours. We try to aim for French working hours, which is about 32 hours a week, 33 hours a week. Sometimes it's 25, sometimes it's 15, sometimes it's 40, sometimes it's 50. Like we have hard weeks too, right, where we need to put in lots of time in order to get things done. But generally we aim for those much lower than American standards. It's certainly way lower than tech startup standards. And we try to say no to almost everything and do only the things we believe are most important for the business. We also try and prioritize our personal lives, happiness, fulfillment, whatever. Eating well, exercising, taking care of our bodies, taking care of our loved ones having lots of bandwidth to go on vacation or to take care of a sick relative or to prioritize other things in life ahead of the business. And basically our view is that when it comes to the business, we can be very patient. Right. If it takes us three years to reach $3 million of revenue instead of two years, oh no.

What'S the big deal, right?

Yes.

We picked a sector where we're not getting chased by competition, where it's not a cutthroat field, there's a lot of open space, we can do lots of unique things. And it's because of all these structural support systems, we are able to build a company around chill work. And we want to try and model that for others because we fundamentally believe that you do your best work when you are well rested and feeling psychologically safe and you are emotionally taken care of and financially taken care of and you don't have lots of other stresses. And by making great decisions, you can get a lot more done and move the needle on the business far better than if you are stressed and burnt out and working 50, 60 hours a week plus and underpaid. In those situations, you will do poor quality work. Even if you do high quality work, you'll make worse decisions and that will cause the work that you need to do to be more than what it would be otherwise. And so this is the idea of chill work.

Well, I'm so with you because I feel like we also just assume that there is a correlation between I call it capital H, hard work, and if you put in this brute force number of hours, somehow everyone's better off. That's not true at all. You might not earn more money, like you said. Oh, we all know what it's like not to get a good night's sleep. Even worse if you have three bad nights in a row or three bad months in a row if you have a newborn at home or something. I'm a shell of myself. When I'm not getting good sleep, there's nothing good happening. No good decisions, no good work is happening, no strategic thinking. And so it's not even necessarily true that working in a way that feels so hard yields results. But one thing that I've been observing, and I'm curious to hear your take on this, is that my values are really aligned with yours, with free time. And I say how we bake is as important as what we make. That the way we make things and products, it's kind of infused in the DNA of the output and even the potential success or failure of something. I do think that it's easier to really feel good about these values when things in the business are going well, and it's much harder when they're not. Like a business will go through inevitable dips, ebbs and flows. And I find that when my business is going through a dip, that's when my little gremlins come in. Are you sure this way of working can work? And even sometimes that voice gets personified by people in my actual life saying, well, it's obvious you just don't want to work very hard. No wonder your business isn't going well right now or is having this or that challenge. And you even said in Lost and Founder, you said, if you're not willing to sacrifice and to make money costing and painful decisions that bias to your values, don't bother having them. So have you had any moments like this, even in the recent years with SparkToro, where just for a moment you doubted yourself because things took a turn?

So I don't think of chill work as something that must be always adhered to. Exactly right. So the business has gone through times when it needed significantly more effort from one, two or three of us. There's only three people who work at SparkToro. Just myself, Casey and Amanda. And there are weeks or maybe a month or two where it's been high stress. You know, lots of things are changing. When Elon made all the changes with the Twitter API, that was a very stressful time. And we were quite panicked. We probably worked more than we should have because many of the worky things that we were doing didn't produce anything.

Right.

It was just panic response, oh, I should be on and let me try and document all this stuff and let me try and plan out that. And I don't know that we really got anywhere. Like, we could have probably just taken our usual chill pill and been like, this is going to pass. Let's see what data is out there. We'll email some people and brainstorm some ideas. This is the crazy thing. The crazy thing that's true is if from the start you design a business that does not scale linearly to amount of hours that you or anyone else puts in, but it scales instead on quality of decisions that you make. And software is a perfect example of this. So too would be any sort of investing business or a financial business, even many hardware and creative businesses. Right. The design of the business itself and what you choose to build and not build, prioritize and not prioritize, those things are going to have far more of an impact on the probability of success than amount of hours you can put in. Right. We're just not in the 19th and 18th century where it's, well, you can push your body to keep whatever that pickaxe hitting against the rock until you hopefully find some gold in them hills. Funny, that's just not our world. And so my values haven't been challenged too much on this.

That's awesome.

I hear what you're saying, Jenny, and I agree with you. I have those gremlins too. They keep me up at night sometimes when the business isn't going well, they stress me out. But even in those moments, I try and remember that the best thing I can do is take good care of myself and have a positive, healthy, fulfilling, well rounded life. Get lots of good sleep. And your mind is an incredible organ. It will work for you in the background. You know how you always have those great ideas in the shower? This is what people always talk about. So when neurologists study this, they can prove that essentially when you are faced with big intellectual challenges or big problems that your brain is mulling over or ideas around work or creative stuff, whatever, your brain will work in the background. You have to give your brain that background time to do those things. You were mentioning that your father is like a singer songwriter in the late portion of his career. And funny enough, a lot of incredible singer songwriters talk about how when they took time off from just playing and practicing all the time, that's when they came up with their great music.

Yes, that's true. He would get downloads from the Muses every time he would go for a long walk and he would have index cards in his shirt pocket to stop and write them down. And he always says now, because he's practicing to play the guitar to these music, to these lyrics, he says skills are in the drills. And so my dad has this checklist notepad he made for himself with his set list and he practices every day. Every day, every day. But every now and then something happens. Maybe he goes on a short trip or he gets sick and he can't practice. And on the one hand, it's concerning, oh, no, I didn't do my drills today. But then, sure enough, it might be a week later there's a new breakthrough. Like suddenly he calls them clams. Maybe that's a universal term. But when you make a little mistake and it's like, oh, actually when he came back to it, something had sunk in in that week that integrated that learning and that practice.

This is absolutely true. Everything to do with running a business and doing things smart. For some business owners, it's okay, you know what? I have been putting this off for too long and I really do need to make this smart hire that's going to help me take care of this problem space in our business that I don't really understand or the opposite of that. Gosh, you know what? I've got someone on the team who's really dragging down everyone else. And so even though their work might be good, I gotta let them go. It's hard, it's gonna suck, but it's the right thing to do. And everyone else on the team is gonna do so much better when this person's gone. And sometimes it's, you know what, we need to stop focusing on this new product line and go back to the basics. Or alternatively, okay, I can see how the future, in the future, people will not be buying the same thing that we're doing today. And we've gotta make this transformation, even though it's going to be a little painful and hard sooner rather than later. And those decisions, when you make them, how you make them, with whom you make them, about what you make them, those are going to drive the business so much more than, oh man, I stayed up until 2am last night writing emails.

Come on. Right? And you know what's funny? Even as I asked you that question, if you ever have doubts as I look at and consider what you said, everything on that list is so reasonable. Like if you just take a. What is the highest good for all involved and for the system itself, those are things I could just totally see that you would believe in through the good, the bad and the ugly. Like doing only the things that we believe are most important. Prioritizing your lives, happiness, fulfillment, eating well, loved one. It's like I always come back to what is it all for? If you're not gonna do those things.

You never meet and you never hear stories of people who at the end of their life are like.

Yeah, I made a few million dollars, but I really should have made more.

That's not what anybody cares about, really, Right? The money thing is it's two things. For people who are already quite wealthy, it is a way to stay.

Busy and a way to keep up their habits. And in some cases, a way to have fun too, right? Like, some people just get a lot of joy out of the process of building a successful business, a financially successful business. And then for some people, it's an ego and a comparison game. Like, I can't stand that Elon Musk is richer than me. I have to find a way to be richer than him. And you know, the fortune rankings are all that matter. And you can literally hear this kind of stuff, right, from people in those echelons of wealth who everything else in their life is so easy that they have to create the challenge for themselves of not just being incredibly successful and able to do and fund anything they want, but also richer than somebody else.

Right? Oh, gosh, I know those status games, like everybody says, we're all playing status games, it's just a matter of which ones.

But I don't think that's true at all.

Tell me more, because I just heard from my friend Paul Millard and he said if he's playing any status game, he wants it to be generosity. That's what he wants status in. And I loved that take.

I love that too. But I think that many, many people, many human beings, and I'm going to say this is a broad generalization, but I'm going to say many women and non binary folks, like people who are not men, are not playing status games. It's not a game and it's not about status. Right. Their lives. As we evolve and get smarter and get older and get more experienced, we realize that we don't have anyone to keep up with and that no one really cares or compares us to someone else. I hear this, in fact the most. I hear this from folks who are in the 60s, plus that the status game that they thought they were playing in their 20s and 30s turned out to be less important than they thought in their 40s and 50s and faded entirely by their 60s and 70s. I hear that over and over.

I do find that fascinating that every decade, if you ask the people who've been through that decade, you just hear increasingly, oh, well, in my 30s I got so much better at saying no. In my 40s, I stopped giving a shit what anybody thinks about me. I was like, I just love hearing. You could just see people with every decade it's more shedding layers of societal garbage, you know, that they no longer need. But it's so wild to me that it's like we all have to go on our own journey through it. Someone else can't just tell you you gotta experience it.

And here's the strange part, is that this is a pretty uniquely American phenomenon. I mean, I will say it's spread to other countries, Western countries especially, and it has spread to parts of Asia as well. But it's a unique cultural thing to believe that this status Game is the way everyone is. If you travel a lot, if you meet people from many other places, many other walks of life, even here in the United States, you will quickly see that the folks who paint your house or the folks who are, you know, teaching your kids at school or the folks who are working at the airport, they're not playing status games.

That's not it. It's just us wacky entrepreneurs who, over the course of the last couple centuries, have developed this insane subculture and then try to spread it and try to convince ourselves that we're not insane. It's normal. Everyone's like this, right? It's not me.

There's a moment I love to ask you about that you describe in Lost and Founder, and it's the moment of turning down an offer to buy your business that was for a lot of money. And then later, you know, you would have loved to sell for that amount. Okay, you tell the story in the book, but I'm wondering now, with the gift of hindsight, like, knowing what you know now, do you look back on that time and think, I know exactly why it went down like that? Because I could just imagine in the moment you go, I could have retired. Not that you brand would ever stop working because it's so clear how passionate and you love what you do. But I'm just curious with the gift of hindsight, where you are right now, how you look back on kind of why that was your path or meant to be.

Ooh. So I don't believe in meant to be.

Okay, good. Good. Love it.

And that's despite the fact that I'm for sure died in the wool. Romantic in a million ways. I just don't think there's fate. I don't think there's only one person for everyone. Even though I've been with my wife for 20 plus years and I think we have an amazing relationship, I plan to be with her forever, but that doesn't mean that I think there's only one outcome or those kinds of things. I still regret that decision not to sell the company. And if I could go back in time and do it over again, I would have changed that decision. I would have sold it. I think in retrospect, it would have worked out even better, massively better than I thought it would have at the time. And it would have saved a lot of pain and heartache as well. The only thing I'm grateful for about it is that I can see a universe in which we sell. Moz. It was my decision to sell it or Not. But you know, obviously more than just one person built that business. So we sell the company and I don't know, I become one of these venture worshiping business bros, right? I'm like, oh, this asset class is great. Everything always works out. It's so wonderful. Look at, you know, we sold to another venture backed business and then that business went public. It was HubSpot and the IPO made us another small fortune and we got paid all along the way. And this is great. Everyone should do it, right?

It's such a different book.

Yeah, exactly, exactly. So the best thing to come out of that poor decision, poor personal and professional financial decision, is the humility and insights and.

Alternative view that kind of in lost and founder. And that sits in my brain now, right? Because 95 out of 100 venture invested businesses do not return their minimum capital requirements and are basically failures. Not every single one of them goes entirely bankrupt and formally declares bankruptcy. But any venture investment that doesn't return sort of 3x minimum to its investors is. Nobody's having a good time. It's not going great. Being able to see that firsthand and describe that experience and talk about it openly, which so few people who've been through it are willing to do because they want to get back on the venture train and they want to be able to raise again. They want to preserve their relationships. And also I think a lot of people want to preserve their impression of themselves as not being the point of failure. Right? But I know, I know that I was Moz's point of failure. I know that it was my poor decisions not just around the sale, but other things much later in the business too. My decisions that caused it to be a mediocre outcome for its investors and a pretty crappy outcome for its employees.

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I really appreciate you sharing and being so open. I mean, now in the book, it is such a gift. Sometimes I wonder, looking back on moments like that, it is hard to say it was a mistake or I still regret it. What I get curious about is, wasn't there some kernel within you that was making the best decision at the time? And I don't know, it's like, did you go against your intuition or did your intuition actually speak up in that moment? And it's just that on paper, it looks and sounds like the wrong decision. Does that make any sense?

It does. So let's see if we're talking about two sort of monumental, actually three monumental decisions in Moz's history. One is choosing not to take the deal with HubSpot. Two is raising a second extremely large round of venture capital. In 2012, we raised $18 million when the business was profitable and didn't need a dime. And three was stepping down as CEO and replacing myself with my coo. And I think that all three of those decisions, the first one, the one not to sell, was made not because the math didn't pencil out. It almost penciled out. It was a reasonable deal on paper. And if I believed. If we believed that HubSpot was going to have a successful onward journey, which obviously it turned into one of the most successful SaaS businesses on the planet, then it would have been an extraordinary deal. And I said no because of ego, because I thought that we were going to be even on our own, as amazing as they were. And I was like, well, our revenue is only like two years behind them. If we just keep growing like we have been the last few years, we're going to catch up to that. And so why would I take this multiplier on last year's revenue when this year's is already going to be twice that, all that kind of stuff, right? And the decision to raise that second round of venture capital, that was ego driven again, right? I felt like a fraud. I felt like I wasn't playing with the big kids. I wanted a big name investor on our list of funders. I wanted what looked like the path to ipo, right? Like, oh, well, the path to IPO is always you get like one of the big name firms behind you and you raise a lot of capital and then you deploy that capital to get growth even faster. And of course we raised that money and then growth slowed down, which no surprise, because a business that's been profitable and operating very intelligently, that's suddenly like, okay, how do we quickly spend $18 million. Hire all the people, do all the things. The third one was this decision to step down from the CEO role, which came from a place of feeling like I could no longer effectively run a company because I was depressed and anxious and just in pain all the time and couldn't sleep and thought that I had to work harder to, you know, to dig my way out of it instead of make better decisions. A little different.

On that third one, well, it's just amazing, like I don't know your self analysis around this and just at every stage and remembering where you were. And I always keep the Chinese parable will see in mind. I love that one because it's like, oh, I could have gotten a windfall of all this money and it could have gone a different way. But then it's like, we'll see. Just like the thing of hard work, there's actually nothing saying you, Rand would have been any happier.

Right?

But it's a trick. It's a trick. We think. Almost reminds me of what you hear guys like Jim Carrey saying. I wish everyone could get everything they wanted so they would realize it's not it. And you had a very painful path along that road. And it's like the Rand I saw joined the call today. It's like you're glowing and you look happy and I don't want to put words into your mouth, but we just have no clue what the other Rand, what that sliding doors path would have been, just with more dollar signs in the bank, you know, and of course you'd want to do good things with it, but there's no guarantee that anything turns out any better than now.

That's absolutely true. You know, there's a million things that I'm just so grateful for. One of the biggest and best things for sure, Jenny, is that the day I left Moz, that was a terrible and dark day. There's actually a photo that my assistant took, Nikki took of me with a box of all my stuff. And I'm walking down the stairs at the Moz offices and I'm younger than I am now. This is five years ago, but I look ruined. Like, just destroyed. That night, I went home and wrote a blog post that I put up on my new company's website. Because I started SparkToro six hours after I left Mozart. And the blog post was called My Last Day at Moz. My first day at SparkToro. And the next morning and the mornings for the next two weeks after that, I woke up to just thousands beyond thousands. So many messages I don't think I ever actually got through them all.

Wow.

Of people saying, like, you changed my career. Wow, you changed my life. You helped me, whatever in this terrible time in my life. You know, I learned digital marketing because of you. I learned SEO because of you. Your videos inspired me to do this. I was working this job, and you're the reason I got promoted. I saw you at this conference, and you introduced me to this person, and they hired me. And because of that job, I. I could afford our wedding. I put my kids through college. Like, so many beautiful stories, so many that I don't think any reasonable human being could be like, oh, my last 18 years. That was how long lives at Mozzarella was a failure. Like, obviously it was not a failure. Maybe. Maybe it didn't turn into the tens or hundreds of millions of dollars that I hoped it would for me personally, for our investors, for the team especially. But, hey, I mean, maybe there's something more important than money out there, right?

And now you're such a voice for that. I mean, that is the one thing of going through the wringer on something that if you're willing to share openly and honestly as you have been, I do think there's something so healing about being able to share it and say the truth and the truth of your experience and then how many more people that helps as a result. And it's not that we would wish for you to go through that or to have regrets about it, and yet it is so inspiring and reassuring to the rest of us. So really, thank you.

Oh, gosh, no, my pleasure. I mean, now, you know, I hope I get to do that on a little bit of a different scale, right? With folks like those who are listening to your podcast, right? That the free timers think to themselves, right? After hearing this, they're like, yeah, you know what? I don't need to kill myself working hard. I can make better decisions by giving my brain time off to work on those decisions. I can sleep. I can prioritize these other happy things in my life. And I cannot feel jealousy or regret about the, you know, few entrepreneurs who raise a bunch of money and become 100 millionaire pluses. Jenny, I know a few of those people. Like, I have, I don't know, a few dozen people in my network who are extraordinarily wealthy, right? They've made a ton of money through this stuff. Not all of them, but most of them are much less happy than people with.

1/100, 1,1000th of their net worth.

That reminds me, I Don't know if you know Lee LeFever. I think he's. Yeah, so he says the same thing. He's like, he's friends with wealth managers and they're like, actually, there's such a burden. You have all this stuff, all these properties to take care of. You need this whole staff, like, comes with its own stressors. Okay, Ran, so that is the perfect segue into the last question, which is a permission slip. If you could give fellow business owners permission to do something differently or drop something altogether, what would it be?

I feel like we have been giving permission slips throughout this whole conversation. And so I want to do a hard turn and go super tactical with this. And that is Jenny, to say. I want to give you permission to hire an outside expert, a consultant or an agency to do that thing that you have been thinking to yourself, gosh, I wish I was better at this, or, gosh, my business could really benefit from someone who knows what they're doing in this space. And rather than hiring an employee or trying to learn it yourself, let me suggest that consultants and agencies, especially right now, because demand is down a little bit for that sector. Not only are they doing quite high quality work, especially if you get a reference to a good one in whatever space you're in, but they see hundreds, if not thousands of businesses like yours and all the mistakes that they've made and they've seen the transformation stories, they've seen the stories where it doesn't work out. And that perspective versus being just one person inside just one business or hiring someone to work inside just one business is ludicrously powerful. Just crazy powerful. Sparktoro has used almost two dozen consultants and agencies in the first few years of its life as a tiny little three person company. And I would give those people, those consultants and agencies, everyone from the people who do our taxes to our accountant, to the folks who have given us our legal advice and our financial structure advice, we've had a bunch of folks do marketing help for us and audience research and customer research, right? Where they get on calls with people who are customers of SparkToro and help us understand what people want and don't want and aren't happy with. All of these consultants and agencies have done such incredible work for us business. Changing trajectory, changing stuff. So you have my formal permission to go out, reach out to your friends and your network or to me if you want, randparktoro.com, if there's someone in marketing universe that could help and get a reference to a great agency who could help you do this thing that you really need to do for your business and you don't have time for, you don't want to hire for, you don't want to learn.

I love it. And I love your description as well. Ludicrously helpful.

Game. Changingly amazing. Ran, thank you so much. You generously shared your email. Of course people should check out sparktoro.com is there anywhere else you want to send people to keep in touch and learn more?

My suspicion is if you're listening to this, you probably are not super thrilled with what's going on at Twitter at the moment. Maybe you're not particularly excited with how things are going down with Reddit's leadership right now. Maybe you're looking for some other places to participate. I'm very active on LinkedIn where I'm just Rand Fishkin and also on Mastodon, which is part of the Fediverse and I really like that model that works kind of like email, but it's a social network like Twitter and I'm randfish on Mastodon as well.

Amazing. I'll put that in the show notes. I signed up for a Mastodon account and then that's as far as I got.

So if you go over there and you use it, Jenny, I'll follow you. We can follow each other, we can have little chats.

Perfect. You'll be my first and only friend so far. Amazing. Ran, thank you so much. And thank you for leading the way not just with your book, but just all that you've done. Even in the early days of all this Wild west Internet stuff. You've been a shining light and such a generous person in these communities since the very beginning. So thank you so much. And thank you for the open, honest conversation here today too.

My pleasure. Thanks for having me.

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