The Growth Leadership Show #1 - Rand Fishkin, Co-Founder & CEO SparkToro
Summary:
Rand Fishkin is the former CEO and Co-Founder of MOZ and is currently building his next company SparkToro. He became famous through his video series Whiteboard Friday and has recently published the bestseller book "Lost and Founder," where he exposes the often brutal reality that lies behind the glorified startup life.
In my conversation with him, Rand discussed his previous failures and what he learned from them. We also talk about when hiring an agency makes sense and why building the right product is a prerequisite for effective marketing.
Check out: SparkToro
Topics Discussed:
03:40 - Stay true to your values
06:12 - Rebuilding after failure
09:00 - How to explain failure to your team
11:00 - Identifying where you failed how to fix it
16:57 - Effective marketing requires a great product
22:00 - Three crucial building blocks to scale your business
24:30 - Never stop having conversations with customers
28:16 - The benefits of hiring agencies for customer research and marketing
38:22 - What is SparkToro and Rand’s future vision of marketing
46:51 - The Wall Street Journal Problem (how to not do PR)
49:33 - Understanding and Leveraging Customer Research
53:27 - Using Target Audience Keywords
Resources:
- Lost and Founder - Rand Fishkin's Book
- The “Wall Street Journal” Marketing Problem
- The Cross-Country CEO Swap
- ProfitWell
- Conversion Rate Experts
- Product-Market Fit
- Whiteboard Friday
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🤯 Three Episode Highlights
Following are three personal highlights from my interview with Rand. I cleaned up the transcript a little bit for better readability.
- Agencies have such broad exposure and insight into different companies, they get really good a pattern recognition. They have made a lot of mistakes already and you can profit from their expertise.
- Usually no one will care as much about the company as its founders. But when you get a good agency they care almost as much as the founders do, because either you will use them again or keep paying them if they do a great job, and you will stop if they don't. Full-time employees rarely have these incentives. It's hard to fire them and it's a pain in the ass to hire someone new. The relationship isn't as obviously connected to the transaction and value versus the agency model.
- With agencies and freelancers you can keep your costs incredibly low and super variable, as opposed to a high fixed cost model with full time employees. A few months you spend $28'000 on a contract to get a project done and then when you want to keep your costs low for the following three months, you stop outsourcing for a while.
- From a macroeconomic perspective, agencies are a beautiful thing, because you employ lots and lots of small businesses instead of a few giants having all the control. That makes for a much more secure, robust and wealth spreading economic picture. You can think of yourself as also fighting against income inequality when you do this 🙂
Which Marketing Areas are Well-Suited to Outsource?
- Customer Research is great, because the company you hire has no pre-existing bias and research projects can be very well defined, scoped out and time boxed.
- Digital Advertising should be outsourced. It is very likely not your expertise, the platforms' rules changed too fast for you to keep up and the early mistakes and the time it takes to learn are going to be costly.
1. You want to build a marketing engine that scales with decreasing friction. A real flywheel, as opposed to kind of the boulder pushing of just buying ads, and buying ads. You're not gaining efficiency over time, if you are throwing money at Google and Facebook because each cost of a new customer is basically the same as the last one.
3. Have regular conversations with customers. You as the CEO, CMO or Head of Marketing need to do this directly. There's no substitute for consistently talking to lots of customers who give you honest feedback and tell you whether they're using the product or not. How many of our customers are actually engaging with your product? How many are coming back at least once a week? How many are coming back at least once a month?
I think what really sucks is in a bunch of companies where you have customer service people who are like five levels removed from the CEO And they're the ones talking to customers."Someone who's working in customer service should come right to the CEO and be like, "Hey Sandro, I got to talk to you. We got a real problem. You need to fix this". And not, "Oh my God, that that's the boss. I should probably run away".
3. You need a team that cares deeply about your product or service and is walking in the same direction. That's a culture-building exercise. How do I get, not just the right people on the bus, but also get them all pointed in the same direction? Thinking about the same kinds of things, having, you know, sort of the emotional maturity to handle these problems and a low power distance between yourself and your team members.
The last thing you want as a marketer is a product that is not amplifying your message by generating excitement and loyalty among your customers. The reason a product with no surrounding excitement is so painfully devastating for marketers in particular, is because all of the marketing systems out there right now are algorithmically driven.
The Algorithm Wants Engagement
Every ad platform out there from LinkedIn, Facebook, Instagram, Reddit, YouTube and Outbrain to Google display network and Twitter. Every single one of them is driven by engagement. How is your click-through rate? How high is your engagement rate compared to all the other people who are bidding on those terms or trying to rank for those keywords or trying to appear in those social feeds. And so if you don't have very high engagement, because you have a product that resonates with your audience and customers, guess what? You are going to suck in those algorithms.
Those algorithms are designed to push you down if you can't deliver. They are designed to make your cost of click, your cost of acquisition very high and your visibility very low. Don't play that game. That game sucks. That game is so, so painful. As a marketer, you come back and your numbers look like shit, and in a way it's not your fault. Right?
And then again it is your fault because you didn't have that hard conversation with the chief product officer, with the CEO, with the board of directors. You did not have that hard conversation where you told them:
"Hey friends, this is how these systems work, I cannot smear lipstick on this pig and expect to take it to market and have it perform well. Everyone is going to see through it, or if they don't see through it, initially, they will see through it as soon as they try it. Look at these metrics. Look at our numbers.
This product is not resonating and therefore will not receive amplification. And therefore every impression that I get is driving down our algorithmic ability to reach more people at a lower cost. Don't force me to do that. Don't throw bad money after good. Keep investing in the product. And when it reaches the metrics that we need, then, then let's go push for growth."
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