Beyond Venture Capital: The Bootstrapper's Blueprint | The Pair Program Ep38

Join us for an exciting episode as we dive deep into the world of bootstrapped startups with guests Rand Fishkin, Co-founder of SparkToro & Snackbar Studio, and Liam Martin, Co-founder and Chief Innovation Officer at Time Doctor.

These two remarkable founders share their firsthand experiences, insights, and secrets to success in the world of bootstrapping.

They Discuss:

• What inspired them to choose the bootstrapping approach.
• The unique challenges and journey of bootstrapping a business.
• The fascinating stories behind the founding of their respective companies.
• Why the venture capital model isn't the right fit for every startup, despite common beliefs.
• Financial management and lean strategies during the early phases of their startups.
• How bootstrapping significantly improved their long-term financial standing.
• And much more!

About Rand Fishkin: Cofounder of SparkToro & Snackbar Studio. Founder and former CEO of Moz. Author of Lost and Founder: A Painfully Honest Field Guide to the Startup World.

About Liam Martin: Liam is the Co-founder and Chief Innovation Officer at Time Doctor, pioneers cutting-edge workforce management tools to enhance remote employee productivity. He co-organizes the annual Running Remote Conference, and co-authored the bestselling book "Running Remote," advocating for collaborative and agile remote-first organizations.

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Welcome to The Pair Program from hatchpad, the podcast that gives you

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a front row seat to candid conversations

with tech leaders from the startup world.

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I'm your host, Tim Winkler,

the creator of hatchpad.

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And I'm your other

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Mike Gruen: host, Mike

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Tim Winkler: Ruin.

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Join us each episode as we bring

together two guests to dissect topics

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at the intersection of technology,

startups, and career growth.

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Welcome back to The Pair Program.

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Tim Winkler here.

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Mike Gruen joining me per usual,

Mike, it finally happened.

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Um, I caught, I caught the COVID.

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I dodged it for three and a half years

and, uh, sure enough, like a disc golf

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retreat with 15 guys in a bunk room.

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We'll, uh, we'll do the trick.

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So

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Mike Gruen: congratulations.

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I don't know if that's the right thing to

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Tim Winkler: say, but thank you so much.

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I had a speech planned and everything,

but, uh, it's been a rough ride.

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I'm not going to downplay it.

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It was pretty brutal,

but we're, we're back.

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We're back in action.

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Um, all right, let's talk

about today's episode.

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So, uh, it's, it's, it's an episode

that I've been itching to do.

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Um, you know, the state of venture

capital right now kind of feels like

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high stake, high stakes gamble, , um,

capital access, tightening up.

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Uh, you know, bootstrapping is

becoming a, a more common scenario.

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It's something that I've done.

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I know it's, it's something that

our, our guests have done here.

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We're gonna, we're gonna dissect a

few things here around bootstrapping.

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Uh, talk about some strategies for

kind of sass versus services business.

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Um, user user growth hacks

for like lean operations.

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We're gonna discuss, you know,

how you might be able to leverage

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community and social media to amplify

your brand as a bootstrap venture.

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Uh, and so to unpack all of this,

we've got some excellent guests

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with us who have scaled businesses,

uh, Past the multi million and ARR

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mark with, without outside funding.

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And I've also seen the other side

of the coin as well and taking

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some funding at a certain point.

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So it's, it's great perspectives

on the topic all around.

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Uh, so joining us, we've

got, uh, Rand Fishkin, uh, co

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founder and CEO of SparkToro.

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An audio audience research software

company, uh, prior to Sparturo,

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ran was the founder and CEO of Moz

marketing analytics company for SEO.

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And he's the author of lost and

founder, uh, painfully honest

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field guide to the startup world.

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I see it right back there.

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Uh, and we've got, uh, Liam Martin, uh,

co founder of time doctor, uh, software

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company, helping remote teams with time

tracking and the co organizer of the

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running remote conference, which I was.

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Researching pretty interesting,

largest conference on building

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and scaling remote teams.

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And Liam is the author of

the book running remote.

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Um, so guys, we'll have you here

on The Pair Program with us.

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Rand Fishkin: Yeah.

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Thrilled to join you, Tim.

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Thanks for having us.

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Yeah,

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Liam Martin: very exciting to be able to

jump into all of this stuff, particularly

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when I want to kind of jump off with like,

I get a one sheeter whenever I'm going

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to be on a podcast with somebody that my

assistant puts together and she just had

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an all caps need to read this blog post.

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And we sent the email back and

forth, and it was your blog post

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that you just written recently

about your experience with, um, and.

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And the drama that just happened during

that time and I realized I was like, this

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is why I have a bootstrapped business

to be able to pull leverage, like, to be

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able to pull that money off the table.

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Right?

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If you're, if you're doing really

well, it's like, there are certain

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times when you should leave the casino

or at least put something in the bag.

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And I just.

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It was a really great piece of writing

and I don't know if you guys can put it

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up in the show notes, but everyone should

listen to it, particularly if you're a

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founder, that's, you know, got more than

a couple million dollars in your pocket.

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Yeah, no

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Tim Winkler: doubt it was the

final chapter of my 1st startup.

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Is that the title of the blog?

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Yeah, yeah, I think so.

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Yeah, well, it resonated with me.

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It's a great piece.

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Um, it'll, it'll certainly

probably make its way into

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the conversation here as well.

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Um, but, uh, yeah, again, thanks guys

for, for taking time out and, uh, and

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spending, uh, uh, an hour with us.

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So.

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Rand Fishkin: Thank you.

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And also to your assistant.

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Wow.

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That that is amazing to get that one

sheet and have that research done for you.

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What a gift.

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That is a gift.

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Liam Martin: It's amazing.

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I have to tell you, we implemented that

about 4 years ago where I get like a

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little 1 page document on everyone that

I'm going to meet 5 minutes beforehand.

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I go through the document.

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I'm like, oh, okay.

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Like, I'm just picking up

on all these little things.

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You used to be a competitive

figure skater 10 years ago.

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And You know, you really like zebras or

your daughter likes Elsa the princess.

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It's all those kind of little

details that you can pick up on.

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It's like this human CRM that, uh, has

totally made my job 10 times easier.

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Rand Fishkin: I mean, this is, this is

a tactic of, uh, of presidents and, and

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candidates as my understanding, right.

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Is that they like, they really know

people and they connect with them.

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And you know, that, and part of

that is just being curious, right.

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Like caring deeply about people.

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Um, I think is a, is a

wonderful thing, right?

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And when, when it shows, man,

it builds relationships like

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Tim Winkler: that.

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Yeah, it's a, it's a,

Mike, take some notes, man.

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Like, can you team me up with these

snapshots next time we're Yeah.

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Um, before we, before we dive into

the, the, the heart of the topic,

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we're going to go around the room

with a fun segment called pair me up.

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We're going to kick it off with Mike.

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You lead us off brother.

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What you got?

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Mike Gruen: So, uh, just took a

trip to Las Vegas, uh, with my wife.

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Um, For our anniversary, we both gamble.

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Uh, that's how we met.

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Um, so my pairing, uh, it's funny cause

it's almost, I mean, you mentioned it,

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Liam, uh, money management and gambling.

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Like you sit down and it's being

disciplined and knowing, like,

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if I'm up a certain percentage,

it's time to leave the table.

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If I'm down a certain

percentage, I leave the table.

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Like, it's not, I'm never like betting

my last nickel or going to the ATM,

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um, or like, oh man, you know, and

I'm also never like up 5, 000%,

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but, um, at the same time, exactly.

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You're never going to get there.

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So, uh, if you want to lose,

if you just want to give it all

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back by all means, keep playing.

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Um, so yeah, so that's my,

uh, so that's my pairing is

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money management and gambling.

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Um, so there you

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go.

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Tim Winkler: Yeah.

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Now we got to kind of hear the back story

on how, how you guys met at a casino.

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That sounds like a fast

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Mike Gruen: casino.

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We just met at my regular home poker game.

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Uh,

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Tim Winkler: I thought

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Liam Martin: it was a

gambler's anonymous meeting.

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Mike Gruen: But, but I mean, like the,

the, the other part of it was shortly

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after we met, we took, uh, a few of

us went on a trip to Atlantic city.

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Uh, she and I both, uh, it was

a bad blackjack shoe and like

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tore through a hundred dollars.

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Like it was just like loss, loss, loss.

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And so we're like, Hey,

let's go get lunch.

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And so then we hung out and talked and

that's how we got to know each other.

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Um, cause she was like a friend

of a friend type of thing.

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So

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Tim Winkler: that's how it all happened.

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Very good.

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Pairing gambling and money management.

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Can't agree more.

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Well, I'll jump in real quick here.

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So for me, it's going to be

a crawling and baby proofing.

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Uh, so my daughter is about to turn one.

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Uh, her latest party trick is crawling.

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Uh, we were lucky enough to kind

of capture it on video actually.

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And then the video, it's pretty funny

because my voice goes from this high

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pitch, excited tone into this, Oh

shit, it's baby proofing time moment.

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So if I have to leave this recording mid,

uh, midway, it's because I've got a little

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Explorer on, on the, on the go right now,

but that's my, uh, that's my pairing, you

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know, we're, we're busting out all of the.

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Everything from the little

corners to the baby gates is,

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you know, everything in between.

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It's my life right now.

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So other than forks

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Mike Gruen: and outlets, which would be

if you're not doing the baby proofing.

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Rand Fishkin: Yes.

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Tim Winkler: Which is why we baby proof.

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Um, all right, cool.

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Let's pass it around.

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Uh, ran.

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How about a quick intro and,

uh, your parent for the day?

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Rand Fishkin: Sure.

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Uh, let's see.

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So quick intro that you already mentioned,

Tim, that I, uh, I started maws and,

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and I wrote this book, lost and founder.

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I do lots of speaking at

events and podcasts, webinars

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and all that kind of stuff.

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Um, my, my favorite thing pairing

wise right now is I love working with.

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Uh, people who are trying to build small,

profitable stuff and helping them do that.

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Um, I don't, I don't know what it is.

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I, I feel this deep sense of both

obligation and gratitude to giving

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back, you know, for folks who, who

read that blog post that, uh, Liam,

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that you kind of kindly mentioned, you

know, Geraldine and I sort of had a,

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had a lottery winning amount of money,

um, come to us a couple of years ago.

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And, uh, I've been suitably, I

think, irresponsible with that money,

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just trying to spread it around.

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Um, and I, I, I kind of love that.

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So forget money management.

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I mean, look, I think there's, there's

2 ways to be in this world, right?

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If you, if you have success in a

field, in a sector, in your life.

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Um, professionally, whatever you can try

and pull the ladder up after you, right?

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And that's that's how a lot

of big businesses are built

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their, their monopoly power.

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They build moats around them.

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So no competitors can come in and

they, you know, uh, use leverage

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their monopoly power in 1 sector to

enter new sectors, find new revenue

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streams and block out everybody else.

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You know, Google's a

classic example of this.

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Amazon, of course, Facebook, right.

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Apple.

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And then there's people who are

like, how do I build an escalator?

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Right.

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I had success here.

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I did well.

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I want to see a hundred people, a

thousand people, ten thousand people

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build awesome businesses in this sector,

spread that wealth and money around.

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And uh, I'm pretty sure the definition

of evil is doing things, uh, that hurt

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other people so that you get money.

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So Let's be the opposite of that.

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Tim Winkler: That's my favorite.

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Oh, that's awesome.

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Good for you, man.

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Um, I love it.

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Liam, let's, let's quickly jump to

you, uh, intro and your pairing.

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Liam Martin: Sure.

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So as you already said,

co founder of time doctor.

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com, which is time

tracking for remote teams.

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And then also co organizer of running

remote, which is the largest conference

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on remote work of which where I wrote this

book, which is a bit of a funny story.

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Uh, I wanted to actually call it async.

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It's about asynchronous management,

but HarperCollins said, we

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sold a book on remote work.

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We have to have remote in the title,

which is incredibly infuriating.

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I'm already like half a drink in,

so I might say something that's

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inappropriate, but that's fine.

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We can

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Rand Fishkin: edit it out.

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I think Harper Collins

made the right choice.

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I think running remote is

a great fricking title.

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Liam Martin: Oh, I mean, it was

a great title for the conference,

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but the philosophy that our entire

community is focused on is there

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was a methodology before COVID.

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Of these remote 1st companies

that were implementing what I

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call asynchronous management, and

that's basically the entire book.

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So I wrote the book about that

subject anyways, but you're right.

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It is 1 of those things that when

we, when I wrote down async as

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a title, you know, like, these

companies have, like, uh, Yeah.

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Groups that they send all of these book

titles to for people to be able to pick

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up and async was five out of five It was

the worst one Out of all of that group,

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but then when we actually spoke to our

core customer our thousand true fans

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type of demographic They were like async.

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Why didn't you call it that that we

should have called it that thing.

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Anyways, that was uh spilt milk but

herrings I thought lagavulin Podcasts

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because it's 4:00 PM where I'm at.

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Uh, I don't know what time it is for

you guys, but it's, uh, it's drink

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o'clock for me, so it's Friday evening.

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I'm very excited to be here.

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And the more that I drink, hopefully

the more truth that'll come up

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Tim Winkler: And that's really why we do these at 4:00 PM on a

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Friday because we wanna see how

intoxicated all of our guests can

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get and still makes sense by the end

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Rand Fishkin: of it.

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So it's, it's only,

it's only 1:19 PM here.

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I still have other meetings.

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Okay.

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So you all knock yourselves out.

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Uh, Liam, I heard, I heard

that, um, Lagavulin is the

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16, I assume, or is it, yeah.

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So, uh.

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It is the 16.

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Yeah.

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So the, uh,

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Liam Martin: the 12 is better and like,

that's the thing that's a little bit

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of a third rail of, uh, in the Scotch

drinking world, but the 12 is better.

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Yeah.

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And I only have the 16 with me today.

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Rand Fishkin: Yeah.

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I mean, the, I, I heard that

basically after Diageo bought

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them, things were not down.

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It is awesome.

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Liam Martin: Oh, okay.

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Yes.

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The PDs.

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That's the thing that just really

kind of, you sit down and you drink

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a glass of Lagavulin and you can't

drink it like you can sip it because

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it's just, it blows up in your mouth

and just, it's very, very nice for.

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Scottish ish people, which one side

of my family is, uh, we love it,

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but yeah, I mean, I think that,

uh, podcasts and scotch are great.

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I do about eight or

nine of these per week.

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And so for me, you know, the ability to

be able to actually just kind of relax and

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have a drink or two on a Friday afternoon.

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I find that those are historically

my best podcasts that I do.

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Awesome.

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Rand Fishkin: I can't wait.

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I can't wait.

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We'll get us into it, Tim.

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Tim Winkler: Yeah, let's,

let's transition into it guys.

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Um, So I'm gonna, I'm gonna start

with a little bit of a, you know,

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I did a little prep, but didn't

have, didn't have the assistant

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to, uh, to feed me the show notes.

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So I went and did it, um, did a little

research on bootstrapping firsthand.

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And, um, you know, there's a, uh, a

couple of different, uh, I guess, origins

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of the term, but one, one that I pulled

was a 19th century saying it goes.

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Pulling oneself over a fence by

one's bootstraps, which implies it's

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pretty much an impossible action.

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So a more modern definition that we'll

tune into is, um, a process whereby an

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entrepreneur starts a self sustaining

business, launches with minimal resources.

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With either no venture capital

or, or hefty angel investment.

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Um, and so then, you know, the

next question I asked myself

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was, so why, why go this route?

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Um, and in the words of, of Mark

Cuban, uh, raising money isn't an

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accomplishment, but it's an obligation.

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So you gotta love the shark tank irony

that, that comes from that statement.

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But for me, anyways, it's, it truly

means full financial control, um,

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you know, minimal debt liability.

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No pressure from investors and the

freedom to steer your business your way.

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But I don't want to sugar coat this

either, just because it's extremely

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difficult, um, it's a path that I

know, uh, well, personally, it's

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filled with stress, uh, potential

for depression, uh, constrained.

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Personal relationships.

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Um, and it, it demands confidence.

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It demands risk tolerance,

self discipline.

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Um, it, it demands determination

and competitiveness.

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So these are all traits that I'm certain

that, you know, our guests today have

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in spades, uh, along with some insight.

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So I do want to, uh, I do

want to jump into it, Rand.

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Let's kick it off with you.

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Um, I'm, I'm very interested

in that Ma's story.

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If you could.

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Just walk us through what sparked

the bootstrap approach and, and maybe

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provide a little bit of context in

terms of like, did it start as a

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services business, a product company,

and then we'll jump to you, Liam.

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Rand Fishkin: Uh, sure.

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So yes, small started

as a services business.

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Um, and, and I guess technically

bootstrapped, um, or maybe debt

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financed, we took out a bunch of

credit card debt and bank loans.

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Um, which went very poorly.

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I don't recommend that to anybody.

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Uh, we found ourselves very deep in debt

after making lots of early missteps.

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Um, you know, I was super young, right?

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I started this on 21.

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Uh, and just, just a bunch of foolishness.

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Those first four or five years got

us into a lot of trouble and then

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eventually started digging ourselves

out as we, you know, got better and

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better at, at the services side.

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It was, it was an SEO consulting business.

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Um, at least at that point it

had been a web design business.

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And then.

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We accidentally built some software to

sort of make ourselves more efficient.

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And then I insisted that I wanted to

share with people and our developer

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was like, we can't, it's too expensive.

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And I was like, fine,

put up a PayPal paywall.

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And he's like, fine, I'll

put up a PayPal paywall.

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And so you had to pay palace

like 29 bucks a month.

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And 6 months after we launched that,

that software for SEO, I was doing more

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revenue than the services business.

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And we were like, oh,

crap, what's going on?

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Um, and, and, you know, we

caught a bunch of waves, right?

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So this was during a time

when 2 things were true.

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1 google was growing at a tremendous rate.

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Of course, the Internet was

growing at a tremendous rate.

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So web adoption.

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So we were riding like a bunch of waves.

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And people in marketing and tech

and investments and startups

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and just every field hated SEO.

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They thought it was a scam.

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They thought it was spam.

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They thought it was, um, an

evil, bad thing to do that

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Google would penalize you for it.

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And so we, we were one of

the only platforms out there.

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There were probably less than 10

or 12 websites that you could go

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to that weren't sketchy, that had

reliable information about SEO.

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And we were one of the only people

providing any kind of software.

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So there was just no competition.

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I don't think we succeeded

because we were great.

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I think we succeeded

because we were very lucky.

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And then eventually we got

smart about some things thanks

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to our luck compounding.

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Uh, but yeah, I don't, I don't

have a, you know, a huge, um,

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love for pure bootstrapping.

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We did end up raising venture

capital sort of after the, after

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the business was taking off.

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We, we raised, uh, 1.

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1 million in 2007 and another

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10 million in 2015, 15 or 16.

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Um, and, uh, I, um, had all the

roller coasters you described, right?

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So.

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Anxiety and depression and just lots

of terrible experiences, um, uh, and

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an inordinate amount of stress, right?

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Once you raise that kind of money,

then you're, you're trying to

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build a billion dollar company.

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Um, Moz basically plateaued

at about 50 million ARR.

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Uh, so really, you know, disappointed me.

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It's investors employ stock options.

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The company was sold, uh, in 2021.

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I had stepped down years before left

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was sold a few years after I left.

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Um, Not a great deal.

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Nobody, nobody did well from that

except, except for me and Geraldine.

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Right.

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Kind of.

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Cause we, we still owned about

20 percent of the company.

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And, um, even that, you know, we did

not get 20 percent of the sale because

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of how, you know, investor rights and

preferences work, but it doesn't matter.

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Right.

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Like it was just, um, yep.

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Tim Winkler: So you were 21 when,

21, when you started this, this

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Rand Fishkin: business.

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Yeah.

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I was there for 17 years.

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Long, long ago that, so Spark Toro, right?

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Eighties

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.

Mike Gruen: Sorry, nothing.

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Bad joke.

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Uh, this should be cut out

'cause I did my math wrong.

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Go on . No.

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Uh,

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Rand Fishkin: interestingly, Mike,

you may have done your math wrong,

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but you're technically accurate.

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My mom, Jillian, who is my co-founder at

Moz, started the business that turned into

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the web design and then the SEO consulting

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Oh, wow.

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Yeah.

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That's impressive.

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Very the weirdest startup you

can possibly imagine, right?

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It's like basically 25, six years

old when it was first funded.

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And then, uh, essentially a mom

and son consulting business turned

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into software, very unusual.

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So anyway, we can talk about SparkToro

in a bit, but, um, I essentially did

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the complete opposite in every way with.

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Tim Winkler: Um, I got questions to

follow up on that, but I'm going to

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quickly pick, pick over to Liam here.

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So Liam, tell us a little bit about your,

your startup journey and how did that form

430

in terms of bootstrapping or how you were.

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Liam Martin: So, and, and to be completely

honest, uh, with you in comparison to

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Rand story, it's nowhere near, uh, crazy

of a rollercoaster, but I actually think

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based off of the blog posts that I.

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Part of that is probably due to

venture that extra stress is just

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like, so frustrating and just the

ability to be able to do what you

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want to do when you want to do it.

437

That's bootstrapping to me.

438

So we started the business

439

So, um, Me and my, my co founder,

I had built some previous business

440

businesses before that, and one exited

for a very small amount of money.

441

So we both had a small amount

of capital to be able to invest.

442

And that's why I want to disclose

that it's not bootstrapped

443

from zero dollars, right?

444

It's bootstrapped from, we had about 150,

200 K to be able to start the business.

445

And from that point forward,

I essentially, um, didn't

446

take a salary for three years.

447

lived on very little money.

448

A lot of my other friends were like,

you're so stupid to raise a series a

449

for like, you know, 5 million and, and

they're living in nice condos and, you

450

know, they're living the best life.

451

Fast forward to today.

452

I have way more money than they do,

to be completely honest with you.

453

And I'm doing way better

because they weren't actually

454

able to sell their business.

455

When you look at venture, it's

really built on the presumption of

456

the Ponzi scheme of acquisition.

457

Really, that's the end point that

all of these companies are really

458

trying to go for and it's like you're

rearranging the chairs in the Titanic.

459

I know that that's very kind of.

460

It's a long winded perspective and

a very forward thinking perspective,

461

but if all of these companies are

getting acquired for like 10 X revenue,

462

eventually the value of these companies

is going to catch up with them.

463

And I even during COVID we exploded.

464

So we were doing maybe like 5, 000 leads

a month inside of our time tracking

465

tool for remote teams, time doctor.

466

And we went to 35, 000 within a month.

467

Like it was just absolutely.

468

Oh my God, I felt like I was in one of

those tubes on game shows where they

469

like spin you around with hundred dollar

bills and you're trying to grab as many

470

as you can and stuff them down your bra.

471

I was working sixteen hour days

every day for six months at least.

472

And we've now hired four people

that did my one job pre COVID.

473

So it was like a lot of things

that ended up happening.

474

And we went into a stage of hyper growth

inside of the company, but we had some

475

offers for acquisition at that point.

476

And some of these offers

were absolutely insane.

477

We're talking like,

you know, 10 X revenue.

478

And it's just like, I remember

talking to my co founder and I

479

was like, do you really believe

that we're worth that much money?

480

Um, this just, it doesn't make any sense.

481

Now, a lot of those deals actually

didn't end up shaking out.

482

And we basically made the decision to say.

483

We're going to keep going with this

because we also run about at that point,

484

actually during the height of COVID, we

were running at about 40 percent EBITDA.

485

So essentially we were able to pull 40

percent of our revenue off the table and

486

it would be handed to the shareholders,

which because we're a bootstrap

487

company was us, right, which was great.

488

So we made enough money.

489

To never have to work a day in our lives

right from that point, but we still run

490

today about 15 percent EBITDA, which is

really kind of where I would suggest that

491

a lot of bootstrap companies sit because,

and I thought this for a really long

492

time, pulling that risk off the table.

493

My financial advisor gave me a

494

He said, so 98 percent of your

wealth is tied into a private

495

company that you can't sell.

496

You need to think about how to pull

some of that risk off the table.

497

You're sitting on hundreds

of millions of dollars worth

498

of theoretical company value.

499

Yes.

500

However, let's pull some of that risk

off the table now so that if that company

501

disappears in a year, you'll be happy.

502

Right.

503

And that was one of the things that

really jumped out to me ran when

504

I read your blog post, which was.

505

And if I remember correctly, it was

around 300, 000 out the other end

506

of, um, 2018 or 2019 that you came,

that you came off of working inside

507

of and I just, when I read that, I

thought, thank God I paid attention

508

to my financial advisor and a lot of

my other friends, because I realized.

509

That type of opportunity, particularly

for bootstrap companies, because

510

we have the autonomy to be able

to actually make those decisions.

511

We're not answerable to a board

necessarily, unless you really want

512

to be, but I don't think you should.

513

Um, it allowed us to be able to go in

different directions and utilize that

514

capital to be able to not only create the

company that we wanted, but then also the

515

security that the founders needed in order

to be able to really go for those like.

516

Huge moves that would hopefully

turn us into a multi billion

517

dollar company long term.

518

Tim Winkler: Ran, did you pay yourself a

salary in those early state, early days?

519

Rand Fishkin: Uh, sort of, I

mean, what my mom paid me, right?

520

Uh, my, my mom occasionally,

like, you know, we'd get together.

521

We'd look at the finances.

522

It was always terrible for those

first, you know, especially five years.

523

And.

524

Uh, basically it was like me

and our programmer, Matt would

525

decide like who, who was going

to take a paycheck that month.

526

My mom never got paid.

527

Um, the paycheck was 800, you

know, it was like, okay, I was

528

making, I was making enough that

I could chip in for the groceries.

529

I was living with my girlfriend, who's

now my wife, Geraldine, and she was

530

paying our rent and all our bills.

531

Yep.

532

I mean, it was, it was, it was a mess.

533

And then, yeah, I mean, Liam,

if I'd had the foresight and

534

experience and thoughtfulness or a

financial advisor, you know, right.

535

I, I think that I would have made

very different decisions around

536

Moz, but I mean, the weird part of

that company was it was incredibly

537

profitable, but ludicrously.

538

So I think, uh, gross margins were

north of 85 percent on the, on

539

the most software business, right.

540

Just incredible business because

it doesn't cost that much to

541

like collect all the data.

542

And, uh, you know, it just, Um, it was in

543

support.

544

Tim Winkler: That's it.

545

Yeah.

546

Yeah.

547

What kind of head count

did you actually have?

548

Like, we

549

Rand Fishkin: blew up head

count and paid people hundreds

550

of thousands of dollars a year.

551

A lot of people making more than

I was making even after we were

552

venture backed, um, because the whole

venture philosophy is like spend

553

money fast to make more money, right?

554

To get growth.

555

Yeah.

556

And so

557

Liam Martin: then what's

the goal of that growth?

558

It's to

559

Rand Fishkin: get acquired.

560

The goal of the growth is either

get acquired or go public.

561

Right.

562

And that was, that was sort of the like,

Hey, get to a hundred million dollars

563

ARR and then sell for between five and

700 or go public on the stock market.

564

So long as you're growing 20

percent year over year, that

565

was the, that was the target.

566

That was the goal, you know, and,

and Moz was well on its way for, you

567

know, six, seven years of that growth.

568

That looked like it was going to happen.

569

And then right around 40 million in

revenue, things started slowing down.

570

Um, and we just never got, I

mean, I can talk a whole bunch

571

about why, but yes, absolutely.

572

The venture model, I think, is right

for very, very few companies, but it's

573

marketed to almost every entrepreneur,

especially in software and tech.

574

Uh, and Most of us should reject that

marketing that one of the biggest

575

things that it did, I'm very impressed.

576

Liam.

577

I'm so impressed that you were

able to like, resist this.

578

I felt like I was not a real entrepreneur.

579

I felt like I was less

of a less of a leader.

580

I felt like I was a piddly

shit, you know, little nobody.

581

And my Silicon Valley peers, of

course, you know, I'm in Seattle, but

582

like my Silicon Valley peers, or even

some of the more successful Seattle

583

entrepreneurs, like they had raised

so much more, their teams were bigger,

584

their total, you know, market cap

was bigger, all that kind of stuff.

585

And, and the psychological comparison,

I'm sure someone, someone called it a

586

mimetic desire, like your desires based

on memes of what You imagine other

587

people to look like in your field.

588

And that mimetic desire drove

so much of my behavior, right?

589

Like yeah, I'm going to constantly be

going to Sand Hill Road and meeting these

590

important people and like, Oh, I'm having

dinner at Sheryl Sandberg's house tonight.

591

And you know, like all that shit,

dumb, like, just, why didn't I just

592

make better software for my customers?

593

Tim Winkler: I snapped my fingers,

everybody just had a quick costume change.

594

And, uh, jump into it.

595

So Maz, you had kind of like given

us a little bit of the backstory.

596

I'm sorry, Ryan, Ryan, you've given

us a little bit of the backstory

597

on Maz, um, as the wizard of Maz.

598

Um, and, uh, you know, I, I wanted

to kind of transition to you, Liam,

599

a little bit about, you know, growing

Time Doctor and some of the early days.

600

Um, some of those, you know, some of

those growth hacks, I guess, in terms of

601

running with limited resources and running

as a lean team, some of those things

602

that you deployed, um, that you would say

helped you, you know, with early success

603

at Time Doctor, uh, if that's anything

from, you know, how you, how you approach

604

user acquisition to, to marketing.

605

Um, I'd love to hear a

little bit more about that.

606

Liam Martin: Sure.

607

I have a philosophy that actually

probably fits perfectly into Ram's

608

strategy, which is if you're going to

own a business for more than 10 years,

609

a tech business that's on the internet,

SEO is probably the best singular

610

strategy that you could implement.

611

And I did a lot.

612

So we, I, when we had no money, I

had, I remember I had one writer

613

and I had one linker and I wrote

two and I did link link building

614

as well, and we just grind it out.

615

To blog posts a week, every week for

three years, like it's just, that's the

616

grind and the reality is that you can

optimize your, you know, there's all

617

of these small little details that will

get you an extra 10, 15, 20 percent

618

juice out of every post that you're.

619

That you're posting, but fundamentally

it is, are you writing content

620

that people really care about?

621

Do they actually, you know,

they actually consume it, right?

622

And do they want to come back

and check out more about you?

623

Just like what we talked about earlier

with regards to that post that I got

624

from my assistant talking about your

journey, Rand, it's like that piece

625

will have me coming back later on

saying, Oh, what else is on the pot

626

or on the blog, whatever it might be.

627

Rand Fishkin: I'm really curious.

628

If you were today starting time

doc, or let's say a new, new

629

business, would you do SEO?

630

Would that be your starting point?

631

Would you start with SEO again?

632

So

633

Liam Martin: I don't want to send this

to an SEO podcast, but I don't know,

634

and there's a couple qualifiers for it.

635

So Google barred.

636

Right, the new version of Google.

637

I am scared shitless of that thing

because I'm 1st, 2nd, 3rd on a lot

638

of really good keywords that generate

tons of money for our business.

639

And all of a sudden, if it's just a.

640

Well, what's the best time

tracking tool for remote workers

641

and it's not me that responds.

642

That's a big problem for us as a

company because we invested tons

643

and tons of money inside of SEO.

644

Uh, and money is not the right word to

use, um, energy time, which was money.

645

I just wasn't paid.

646

So like now I get paid a lot.

647

So the.

648

The reality is that there's a couple of

things that I probably wouldn't have done.

649

There's someone else that asked me that

question, which is, would you take.

650

Like, would you raise money?

651

And I would probably, someone

652

And I actually said yes, because it

653

Like, I don't know if you guys have

seen that curve of like, yeah, it

654

was the best time on the face of

655

and now it's essentially the worst.

656

So now I'm back to no, like, let's just

keep all that equity for ourselves.

657

I would probably say SEO

would be one of my top three

658

strategies that I would implement.

659

Essentially, what I would do

is I would say, what do I want?

660

What problem do I want to solve?

661

I would figure out the communities

that exist around solving that problem.

662

I would inject myself into those

communities and or create a

663

subcategory inside of that community.

664

And then I would go after those

basically, I would say, okay, now

665

that I've built that ecosystem, now

let's try to sell them something,

666

something that I truly do believe that

will solve the problem fundamentally.

667

So like, that's marketing

668

Rand Fishkin: one, one genius.

669

It is shocking to me how few entrepreneurs

think in this strategic, um, putting

670

the cart before the horse, you know,

putting the horse before the cart

671

way of first, let me establish some

expertise, authority, trust in a space.

672

Let me learn about the people there.

673

Let me build relationships there.

674

And then I will create something

that serves this group of people

675

that I'm already connected with.

676

And I know and understand them as opposed

to so many entrepreneurs starting with.

677

Hey, I've got an idea for a product in

a space that I've never been in before.

678

I don't know anybody in that space.

679

I build my product and then I have to

try and figure out how to market it.

680

I mean, I think,

681

Mike Gruen: I think there's a lot of

people that fool themselves into believing

682

that they're experts in the space because

they have a little bit of, they, they,

683

they're in that space a little bit.

684

They, you know, I, oh, I see the problems,

but like there it's, it's, they have

685

a very small version of that view.

686

Um, and then they fool themselves into

687

Rand Fishkin: being experts.

688

I don't mean to stereotype here, but

have you ever met a 19 year old boy?

689

There's something about like the

combination of hormones and culture

690

and, uh, surroundings that just

makes them believe that they not

691

only know everything, but can do

it all and really well, and that,

692

that hyper confidence can be.

693

Useful, I guess, in some situations, but

as it carries through to entrepreneurship,

694

my God, do you just see, you know, you

see venture style, uh, rates of company

695

death, which is essentially, you know,

for every a hundred companies that try

696

to raise venture to succeed for every a

hundred companies that actually raise it.

697

You know, to return what the fund

expects of them for every 100 venture

698

funds, only about 30 actually returned

to their LPs what they've promised.

699

So,

700

Liam Martin: yeah, I have a really

crazy story connected to that.

701

There was a company that I was

mentoring and the founder was starting

702

a, it is a couple of years back.

703

So I don't think he would

care that I tell the story.

704

He was building a tattoo.

705

Platform basically a platform to be

able to manage tattoo parlors and

706

I said, well, what's your history

in, you know, in, in tattooing?

707

Oh, I, I don't run a tattoo parlor.

708

I don't like I asked him, have

you run a tattoo parlor before?

709

No.

710

Have you worked in a tattoo parlor before?

711

No.

712

Do you have any tattoos?

713

I'm planning on getting some.

714

I was like, so is this a

problem that is really.

715

An itch for you.

716

Like, is this something core

inside of your being that you're

717

really excited about solving?

718

He's like, yes.

719

I said, I don't like hot take.

720

I don't believe you.

721

And let's, let's break that down.

722

And I remember about a year

ago, he raised, he raised 1.

723

5 million seed.

724

And, uh, he came back to me and

he's like, listen, I'm really

725

trying to grind out here.

726

I, you know, I've got some issues,

uh, we're about 3 months away from

727

not existing any more payrolls.

728

We're not going to have

any more money in the bank.

729

And I said, okay, cool.

730

Like, what are your numbers like?

731

He's like, well, I'm

doing about 20 a month.

732

And I was looking at his numbers and his

payrolls, payrolls, about 40, 000 a month.

733

I said, okay, listen, you

have three months to do this.

734

We'll cut down your payroll.

735

We'll figure out how to make this work.

736

Founder base sales.

737

You've got to be the

only person that runs it.

738

And he's like, no, no, no, I'm

not making 20, 000 a month.

739

I'm making 20 a month.

740

And I was like, shut it down

immediately, shut everything down,

741

give it back to the investors.

742

Good advice.

743

That happens all the time.

744

And I think it comes exactly to your

point, Rand, from these guys that are

745

just, you know, I don't think he was

19, but he might've been like 21, 22.

746

Yeah.

747

And it's just that desire.

748

You know, then you get the odd Facebook

that comes out of that system too.

749

So I

750

Mike Gruen: mean, there's, there's,

there's always those exceptions, but

751

Dunning, I think what we described

as the Dunning Kruger effect, right?

752

The idea of like, I know a little bit, but

my competence is not nearly as good as my

753

capacity or my capability, my capability,

754

Rand Fishkin: the curve of

sort of knowledge, right.

755

That as you.

756

As you gain knowledge and become more

experienced, you, your opinion of

757

your own, uh, knowledge in a sector

drops dramatically until an inflection

758

point where it starts to rise again.

759

And then you, you slowly

gain confidence again.

760

And, you know, that's probably, I

suspect that's probably where, where

761

folks like Liam and I are around, you

know, marketing and company building.

762

It's like, okay, we're through the, I

know, nothing point over to the, I know

763

something, I don't know everything.

764

There's a lot to know,

but I know something, I

765

Mike Gruen: don't know everything.

766

That's the key.

767

Like the, the, I, I know enough

to know what, that I don't know,

768

Tim Winkler: I think also to like

the beauty of what you're, you're

769

building with SparkToro, right?

770

So it's like, you know, let's think about

user research and knowing where to spend

771

your money, uh, before you just start.

772

You know, spending all your time writing

these blogs, but you might be writing

773

these things on, on things that aren't

really what people are researching

774

or solving that problem at core.

775

So, like, give us the quick pitch

on, like, why SmartTurbo for you?

776

I mean, you, you spent years

and years doing SEO, so.

777

What is it that you, that

you wrapped your head around?

778

Like, this is really what a lot of

folks are going to get value from.

779

Rand Fishkin: Yeah.

780

I mean, and this is, this is

sort of, you know, goes back

781

to my leading question to Liam.

782

Sorry to put you on the spot there, but,

you know, my, my first business, you

783

know, Moz was, was built on SEO as well.

784

Right.

785

So blogging five nights a week,

uh, for years, the first two

786

or three years, we didn't have

nearly the success that you did.

787

I was the only one blogging and,

and they were not good, right?

788

Like, I think you can probably go

back and read some of the old posts

789

from like 2003, four or five, not good

stuff, not useful, not interesting.

790

But slowly I built up the muscle.

791

You know, like going to the gym, you sort

of figure out what resonates with people.

792

Oh, this worked.

793

Why did it work?

794

With whom did it work?

795

Can I replicate that?

796

Can I do it again?

797

And building up this, this

concept that I like to call

798

the marketing flywheel, right?

799

A repeatable process that

scales with decreasing friction.

800

So meaning every time you do it,

it gets a little bit easier to do

801

it again, or it's equally hard to

turn the flywheel each time, but the

802

returns become greater and greater.

803

So, you know, I put out one blog post that

turned into five email subscribers, but

804

tomorrow's blog post turns into six email

subscribers, and the next day it's seven.

805

And you know, if you get a flywheel going

like that, it works really smoothly.

806

And so Moz was built on that.

807

When I left Moz and started

SparkToro, I started initially

808

with a similar mentality, right?

809

Publishing a lot, blogging a lot, and

quickly realized probably Less than,

810

uh, three months, four months into the

process, realize that, oh, wait a minute.

811

There's no this.

812

methodology does not work because

there is no search volume for the

813

thing that SparkToro is doing.

814

So unlike time doctor, right?

815

Where folks are saying, I want

the best time tracking tool for

816

this purpose or that purpose.

817

No one is going out there and

searching for, I want to find, I

818

want a tool that tells me where my

audience hangs out online, their

819

demographics, their behaviors.

820

Nobody searches for that.

821

They didn't even know to search for that.

822

So we have to not only create.

823

The product, we have to create

demand for the product, right?

824

And so going out there and talking,

essentially finding the platforms that

825

our audience was paying attention to.

826

We knew that we wanted to reach

marketers at small and medium sized

827

businesses, agencies and consultants.

828

Those are going to be our core users.

829

And so interviewed tons of

them, talk to them, had those.

830

You know, uh, conversations at their,

at their offices, sometimes over

831

video, a lot over, over the phone and

then turn that into surveys, right?

832

Took that data.

833

Ran a few big surveys to a few thousand

marketers, took those results, um, and

834

looked at what sources of influence do

they pay attention to where, how, why, how

835

can we be present in those places, right?

836

How do I get these conferences

to invite me to keynote there?

837

How do I get these podcasts

hosts to invite me on their

838

show or accept me as a guest?

839

How do I get these publications

to write about SparkTor?

840

And that has been the last

four years of our marketing.

841

We've still, we still get no

search traffic apart from branded

842

search, uh, for Toro itself.

843

Liam Martin: Do you measure branded

search as like an outcome variable?

844

Because this is a debate that we've been

constantly be talking about, which is.

845

Okay.

846

We increase paid acquisition and then

our branded search goes up by 10, 15%.

847

Well, then we equate that branded

search to that paid advertising.

848

And even right now it's very difficult

for us, but I just did a relatively

849

large podcast on the financial times.

850

And almost no impact, but then we

ended up having, I think it was

851

like seven or eight customers that

directly stated, Hey, I came here

852

because of the financial times piece.

853

So the other part of that too, is actual

sales team talking about the attribution.

854

I mean, where did you hear about us?

855

You know, and then

correlating towards that.

856

Rand Fishkin: So I, I have

a very controversial belief.

857

Which is unless you are in

the north of 50 to 100 million

858

dollars of revenue per year.

859

I don't think it is actually

worthwhile to try and measure and

860

attribute most of your marketing.

861

I think that you're better off, better

off hiring good, smart people and trusting

862

your gut instinct and investing in sort

of cool, creative in places that, you

863

know, people pay attention with messages

that you get the sense are resonating

864

and you're going to, you will spend, even

though you will have some waste and you'll

865

make some mistakes, it will be worth it

because the measurement process is so time

866

and capital intensive and so misleading.

867

that you'll actually fool yourself

more than you'll help yourself.

868

And this is because user journeys

are too complex for, uh, multi device

869

journeys in a cookie list, you know,

no third party cookies allowed, EU

870

regulation, Canada privacy laws,

California privacy laws, ad blockers.

871

Uh, multiple browsers, like in this

world that we live in, you cannot

872

track the way you could 12 years ago.

873

I think it's beyond

874

Mike Gruen: that too, because I think that

875

Tim Winkler: it's

876

Mike Gruen: hard.

877

I know that a lot of the brands

that I come to are because I've

878

heard them in multiple places.

879

It's not the one place.

880

It's not the three.

881

It's like the five places.

882

And, and we had this debate at my

last company too, about attribution

883

and do we want first attribution?

884

I said, like, what does it matter?

885

Like.

886

And then like, well, wouldn't it

be good just to know all of the

887

places, these people, we touch

them from a marketing perspective

888

and how do we capture all of that?

889

And it's like, and yes, we spent a lot

of money and a lot of time on attribution

890

and probably could have just put into

our marketing budget and done more

891

Rand Fishkin: ads or, or right.

892

I mean, like, you know, analysts,

I think we had a team of basically

893

three analysts whose whole job was.

894

measure attribution, try and figure

out the funnel, try and figure out

895

what, what content was resonating,

what to nudge people towards, right?

896

Like, Hey, people who consume these

whiteboard Fridays, these blog posts,

897

these pieces of content, they are

more likely to become subscribers

898

and they subscribe for longer.

899

Their lifetime value is longer.

900

And that worked at the time because

we could look across A journey, a user

901

journey quite accurately and say, this

person absolutely touched all these

902

pieces of content across these places.

903

And here's how they came to us

for each of those journeys, right?

904

This is the source.

905

Dark social alone makes

that nearly impossible.

906

Search engines no longer tell you

which keywords someone searched for

907

when they came to your site, right?

908

So like the way, you know, Liam, you

and I could do SEO at a time when

909

Google would tell you which keywords

people arrived on your site with.

910

That was incredible.

911

Now that's gone.

912

You can pay for it, right?

913

You can, in paid search, you still

get, if you believe Google, then you,

914

you know, you're still getting those

numbers, those, that data point,

915

but it's, it's a different world.

916

Well,

917

Liam Martin: I mean,

you're, you're getting it.

918

You're not getting it.

919

You know, it's like if

you're running Facebook ads.

920

Then Facebook, that says that

you're responsible for every single

921

conversion on the face of the planet.

922

And then, Oh, look, and we're

running Google ads at the same time.

923

And they say they're responsible

for every single conversion

924

on the face of the planet.

925

So then it's like, well, who's right here?

926

Nobody at the end of the

day, it's really, yeah.

927

I think you need to take

like a community based.

928

Approach, which I think is kind

of connected to what you were

929

saying, Rand, which is which

community you want to talk to.

930

I mean, using Spark, using

your app is probably a really

931

good place to be able to start.

932

One of the things that I do, if you

don't have that, is find a subreddit.

933

Yes.

934

So if you find a subreddit

about a community.

935

That's your only subreddit and you

should go to it every single day.

936

If you're trying to understand

like, um, you know, retro video

937

games, and you're trying to build

an app for retro video games, go on

938

that subreddit and just be there.

939

Be the most influential

person that's on there.

940

Comment, communicate, just understand

as much as you possibly can.

941

I have an incredibly boring book here

that sits on my desk, and I'll cover

942

up the name of the person because

I just call it incredibly boring.

943

It's, um, it's about the

contact center industry.

944

So this is a, this is a market that I'm

approaching right now is the contact

945

center industry, which is a very, very

large market, tens of thousands of

946

employees that would need time tracking.

947

And I got to tell you.

948

I have read almost everything.

949

I mean, there's like 27 books

on this entire industry.

950

I've read all 27 books because I'm

trying to understand that market and

951

understand how they communicate, get

in love with that particular market.

952

There's so many people now.

953

They're just like, Oh, we're

just going to make money.

954

Well, you actually have to like your

customers, too, and I think that that's

955

a big part of it that not many, as I

said before, with my tattoo guy, right?

956

Like, he ended up actually getting

that tattoo and it looked quite nice.

957

But fundamentally, if you're not

passionate about the problem that

958

you're solving and you're not

passionate about the customers.

959

Tim Winkler: It's not going to work.

960

Yeah, you get burnout quick.

961

Yeah.

962

Ran, I was listening to a podcast that you

were on recently too, about just how much

963

digital marketing has just transformed

964

when SEO and Google was, was everything.

965

But now Google's almost, you know, what

you were saying was like, it's where

966

you end your search for validation.

967

Now it starts on sites like YouTube and

Facebook and Instagram and tic tac for.

968

Your source of ideation where

information is discovered.

969

And so that transformation is just

radically different for an entrepreneur

970

starting a business in today versus

starting a business 10 years ago.

971

Rand Fishkin: And I

want to be clear, right?

972

Like it depends, you know,

the answer is in every niche.

973

This is why what Liam

said is so important.

974

If you get to know your customers

and you understand, oh, they start

975

their journeys on Reddit, oh, they

start their journeys on YouTube.

976

Oh, they start their journeys on.

977

You know, in video games, Twitch, they

start their journey wherever it is in.

978

I would not be surprised if the time

tracking B2B software industry still

979

starts their research on Google.

980

And that is one of the reasons why

it is so crucial that your business,

981

Liam's business ranks really

highly in Google as compared to.

982

Uh, something like SparkToro where

people essentially learn about audience

983

research mostly from podcasts and

YouTube videos and events and, uh, blog

984

posts and those kinds of things, right?

985

These sources of influence

and email newsletter.

986

A lot of email newsletters have

actually been very influential

987

for promoting SparkToro, helping

people, uh, become aware of us.

988

And so the types of the types of

marketing that you do will be dictated

989

by the channels and sources of influence

that your audience pays attention to.

990

And if you, you know, if you get

that wrong, fundamentally, you,

991

you can spend millions of dollars,

thousands of hours, tons of, you

992

know, consultants and contractors

and employee time firing arrows,

993

you know, at, at a bullseye that is.

994

That no one pays attention to, you know,

995

Tim Winkler: and when you're bootstrapping

or working without, you know, investment,

996

you know, it's so, so critical to

get it to get that right early on.

997

Um, you don't have the, you don't

have the, uh, freedom flexibility

998

to, to waste, you know, months

and years of getting it wrong.

999

Rand Fishkin: You know, yeah.

00:50:56,495 --> 00:50:59,735

A big part of a big part of venture

backed, uh, funding, you know, if you

00:50:59,735 --> 00:51:05,084

look at a lot of the consumer businesses,

uh, uh, we work or an Uber or an Airbnb.

00:51:05,515 --> 00:51:06,075

Right there.

00:51:06,585 --> 00:51:09,255

They used a ton of their venture

dollars to essentially just throw

00:51:09,255 --> 00:51:13,385

it every channel they could find

and see which ones performed.

00:51:13,785 --> 00:51:17,675

And if you have a stack of hundreds

of millions of dollars, you can

00:51:17,675 --> 00:51:20,715

afford to waste 10 million on

wrong channels every quarter.

00:51:20,795 --> 00:51:21,935

Right, right.

00:51:21,985 --> 00:51:23,225

But you know what?

00:51:23,905 --> 00:51:27,905

In fact, you can even afford to throw

those tens of millions of dollars that it.

00:51:28,295 --> 00:51:34,505

at channels that will pretend to take

credit for sales that would have happened

00:51:34,505 --> 00:51:39,225

anyway, which I think is a ton of

how digital advertising works, right?

00:51:39,225 --> 00:51:44,395

So there are many, I don't mean to say

that Google and Facebook and Instagram and

00:51:44,395 --> 00:51:50,165

Amazon, uh, that all advertising on those

places is useless, but a tremendous amount

00:51:50,165 --> 00:51:55,525

of the ad dollars that are spent there are

spent there because those ad platforms.

00:51:56,165 --> 00:52:00,295

are essentially, I'm not going to

say in the way, but they happen

00:52:00,305 --> 00:52:03,635

along the journey of a buyer.

00:52:05,465 --> 00:52:10,055

They don't influence the journey of the

buyer, but they happen along the way.

00:52:10,085 --> 00:52:13,815

And so those platforms can

take credit by saying this many

00:52:13,815 --> 00:52:17,825

people who eventually bought your

product, saw your ad on our site.

00:52:19,065 --> 00:52:23,125

And that is fundamentally different

from this advertisement on this site.

00:52:23,455 --> 00:52:27,685

influence this buyer who would not

have otherwise made this purchase?

00:52:29,475 --> 00:52:32,775

Because why work hard to make more sales

when you could just take credit for

00:52:32,775 --> 00:52:34,395

sales that were already going to happen?

00:52:37,835 --> 00:52:38,255

Liam, I'm

00:52:38,255 --> 00:52:39,085

Liam Martin: curious for you.

00:52:39,755 --> 00:52:41,265

Yeah, I have that issue too.

00:52:41,405 --> 00:52:44,215

But for us, because we're

bootstrapped, the fun thing about

00:52:44,215 --> 00:52:47,145

it is that we can actually pull all

that advertising for two months.

00:52:47,940 --> 00:52:50,710

So like we'll run experiments where

we're like, well, let's just shut it

00:52:50,720 --> 00:52:52,842

down for two months and see what happens.

00:52:52,842 --> 00:52:56,260

And then our paid acquisition

guy is like, you can't do that.

00:52:56,260 --> 00:52:58,020

This is 40 percent of our pipeline.

00:52:58,320 --> 00:52:59,100

We can't do that.

00:52:59,390 --> 00:52:59,900

Is it?

00:53:00,040 --> 00:53:00,970

I just did it.

00:53:01,090 --> 00:53:01,890

Let's find out.

00:53:01,890 --> 00:53:06,710

You know, and I'll, I'll get in

trouble if, you know, it's all on me.

00:53:06,710 --> 00:53:09,320

And then we see a 5 percent reduction.

00:53:09,715 --> 00:53:13,515

In our pipeline and

it's like, then it's 5%.

00:53:13,555 --> 00:53:17,655

So if I'm calculating it now, we're

almost, you know, we've got a 22 month

00:53:17,655 --> 00:53:18,965

buyback, not a six month buyback.

00:53:20,860 --> 00:53:22,250

Rand Fishkin: Very, very smart to do that.

00:53:22,250 --> 00:53:28,340

And so few people are willing to cut their

spend because growth is the goal rather

00:53:28,340 --> 00:53:30,310

than profitability or sustainability.

00:53:32,220 --> 00:53:32,490

Tim Winkler: Yeah.

00:53:32,490 --> 00:53:35,510

A couple of last things that I would

point out too, just because, you know,

00:53:35,510 --> 00:53:39,170

it's something from my background

anyways, I, I, my first business was

00:53:39,170 --> 00:53:43,170

an offshore recruiting company out

in Indonesia and kind of quickly.

00:53:43,575 --> 00:53:48,345

Realized, you know, obviously the, the

amount of money that could be saved if

00:53:48,345 --> 00:53:53,815

you find the right resources offshore

for some specific roles that, you know,

00:53:54,115 --> 00:53:59,055

aren't really needed in, in internal

stateside or, um, you know, this part

00:53:59,055 --> 00:54:03,945

of, uh, part of the world, uh, where

your cost is, is much more extravagant.

00:54:04,325 --> 00:54:09,545

Um, what, what if any did, did you

all do in terms of getting resourceful

00:54:09,555 --> 00:54:15,500

for Uh, manpower, uh, from, uh,

hiring offshore to consultants,

00:54:15,750 --> 00:54:19,370

freelancers, you know, those are always

interesting stories to hear as well.

00:54:20,130 --> 00:54:20,660

Yeah,

00:54:21,250 --> 00:54:22,090

Liam Martin: I've got two.

00:54:22,310 --> 00:54:25,770

So we operate in 48 different

countries right now and.

00:54:26,435 --> 00:54:27,265

We do that.

00:54:27,355 --> 00:54:31,435

We generally issue a

salary band for a position.

00:54:31,745 --> 00:54:35,775

So let's say I want to hire

an engineer for 70, 000 us.

00:54:35,775 --> 00:54:39,135

As an example, you probably won't be

able to get someone in San Francisco,

00:54:39,175 --> 00:54:40,785

but I might get someone in Canada.

00:54:40,835 --> 00:54:44,625

I might get someone in, um, Ukraine.

00:54:44,685 --> 00:54:46,235

I might get someone in Romania.

00:54:46,235 --> 00:54:51,030

So we just set the bands and then we

have basically find the best person As

00:54:51,030 --> 00:54:55,590

it connects to that band, and that's

a major cost saver for us generally.

00:54:55,650 --> 00:54:59,740

And then what I love to do with

consultants and for consultants that

00:54:59,740 --> 00:55:01,270

are listening right now, I apologize.

00:55:01,330 --> 00:55:02,590

I've probably done this to you before.

00:55:03,480 --> 00:55:05,300

I call it hot tubbing.

00:55:05,720 --> 00:55:07,220

So I hot tub all the consultants.

00:55:07,390 --> 00:55:10,030

So what I'll do is I'll say, listen,

I love what you guys are doing.

00:55:11,040 --> 00:55:13,780

Could I, could I get like

four hours of your time?

00:55:13,840 --> 00:55:17,910

Like what's the minimum amount that I

need to pay to be able to get you to

00:55:17,910 --> 00:55:19,570

just kind of tell me what's going on.

00:55:20,355 --> 00:55:24,805

And maybe, you know, the full package is

100, 000 and we can start with 5, 000.

00:55:26,245 --> 00:55:31,485

So I do that with like eight

consultants and then I see them all

00:55:31,485 --> 00:55:34,955

in on the same email saying, hey,

you guys all wrote these reports.

00:55:36,785 --> 00:55:38,555

looks like there's a lot of

differences between them.

00:55:39,095 --> 00:55:41,225

Can you tell me which ones are true?

00:55:41,795 --> 00:55:43,705

And they'll do all the work for free.

00:55:44,005 --> 00:55:44,885

It's hot tubbing them.

00:55:44,885 --> 00:55:48,715

It's all putting them in on the same

project saying, I actually bought a little

00:55:48,715 --> 00:55:50,185

bit of consulting from all of you guys.

00:55:50,215 --> 00:55:53,975

And you're all giving me different

information and their ego feeds them

00:55:54,005 --> 00:55:58,375

into really doing the rest of that work

without me actually having to pay them.

00:55:58,445 --> 00:55:59,615

And it's worked multiple times.

00:55:59,735 --> 00:56:02,085

I've done it for SEO quite a few times.

00:56:02,125 --> 00:56:05,235

Cause there's a lot of SEO gurus that

will say like, I know what to do.

00:56:06,335 --> 00:56:10,215

Probably have five or six emails

in your inbox today about those

00:56:10,215 --> 00:56:13,275

people, but you know, you can,

you can hire them for relatively

00:56:13,545 --> 00:56:14,795

little to even do an assessment.

00:56:15,235 --> 00:56:17,865

And then, um, and then just

introduce some of the other people

00:56:17,865 --> 00:56:19,557

that you did the assessment with.

00:56:19,557 --> 00:56:19,894

Yeah,

00:56:21,075 --> 00:56:21,175

Rand Fishkin: fascinating.

00:56:21,545 --> 00:56:25,405

Uh, I, I haven't heard of this hot

tubbing concept before, but I do

00:56:25,785 --> 00:56:29,635

whenever I recommend SEO or marketing

people to folks in my network, which,

00:56:29,645 --> 00:56:31,005

which I get asked all the time.

00:56:31,295 --> 00:56:36,215

My suggestion is always like, Hey, do

your introductory call with 4 or 5 people.

00:56:36,785 --> 00:56:40,235

Explain that your problem have

them explain their solution

00:56:40,235 --> 00:56:41,335

and why it's going to work.

00:56:41,905 --> 00:56:44,145

Pick the person who who

gels with you, right?

00:56:44,145 --> 00:56:45,855

Whose responses resonate with you.

00:56:46,255 --> 00:56:48,925

And, you know, I don't

think necessarily that that.

00:56:49,495 --> 00:56:59,365

Whatever the consultant who is is the

most correct one needs to do the work to

00:56:59,385 --> 00:57:04,915

prove that, you know, sort of unpaid to

the client like that, you know, whatever.

00:57:04,915 --> 00:57:07,645

I can imagine lots of scenarios

where the consultant who was

00:57:07,905 --> 00:57:09,125

connected in would be like.

00:57:09,470 --> 00:57:12,010

I don't think I need to spend

extra time on this, you know,

00:57:12,010 --> 00:57:13,070

trying to win Liam's business.

00:57:13,690 --> 00:57:16,330

I'm sure that many will

spend and obviously have.

00:57:16,400 --> 00:57:21,500

Um, but I think there's so much value

in having multiple conversations

00:57:21,560 --> 00:57:22,880

and I do the same thing, right?

00:57:22,880 --> 00:57:29,300

So we, um, SparkToro, uh, Moz

was very anti consultant and

00:57:29,300 --> 00:57:30,750

contractor, unfortunately.

00:57:31,300 --> 00:57:37,310

Um, And I hold, I hold myself partially

responsible for that because I essentially

00:57:37,810 --> 00:57:42,220

listen to my board of directors and

my executive team who was like, hey,

00:57:42,890 --> 00:57:47,920

you know, consultants, contractors,

agencies, you know, that's the devil.

00:57:47,920 --> 00:57:48,770

You shouldn't use them.

00:57:49,320 --> 00:57:52,340

Um, you know, you got to

build expertise in house.

00:57:53,455 --> 00:57:56,295

That's what makes your

company valuable, et cetera.

00:57:56,325 --> 00:57:57,635

So I listened to that.

00:57:57,635 --> 00:57:59,955

I probably, I should not

have a spark Toro though.

00:57:59,955 --> 00:58:03,715

We use consults and agencies

for everything, everything,

00:58:03,715 --> 00:58:05,255

everything, everything designed.

00:58:07,485 --> 00:58:07,945

I have

00:58:08,105 --> 00:58:10,865

Liam Martin: with agencies, I'll

usually bring them a deal saying

00:58:10,865 --> 00:58:14,555

like, let's say it's an agency

for paid acquisition and I'll say.

00:58:14,945 --> 00:58:15,785

Here's the deal.

00:58:15,905 --> 00:58:19,345

You guys will work really hard the first

three months, and then you'll send me to

00:58:19,345 --> 00:58:23,565

some junior guy after that, and I won't

get the same results, but because we've

00:58:23,565 --> 00:58:26,435

already opted in on those first three

months, and I was happy, maybe you'll

00:58:26,435 --> 00:58:30,365

get an extra two or three months from

me, and then I'll end up letting you go.

00:58:30,875 --> 00:58:34,985

What I would like to do instead

is, why don't I pay you double?

00:58:35,580 --> 00:58:40,920

Whatever your fee is now and the goal

is to be able to take my internal team

00:58:41,130 --> 00:58:47,410

and get them operational to the point in

which we can do that handoff and I can

00:58:47,530 --> 00:58:49,140

move them to an internal perspective.

00:58:49,570 --> 00:58:51,820

Because then it's just

straight up from the get go.

00:58:51,820 --> 00:58:55,284

Like, this is the purpose of this

activity is to be able to take.

00:58:55,445 --> 00:58:58,755

What that agency knows, transfer

it internally into my team.

00:58:59,005 --> 00:59:03,315

And I'm very happy to pay you whatever

above the market rate is, right?

00:59:03,315 --> 00:59:06,685

If, if the average company stays with

you for six months, let's pay you

00:59:06,685 --> 00:59:07,845

for seven, I'll pay you up front.

00:59:08,045 --> 00:59:10,155

And let's just actually

execute on that strategy.

00:59:10,625 --> 00:59:14,315

Cause then it's just a lot clearer

because these difficult conversations,

00:59:14,365 --> 00:59:20,775

I find it's just this, this trend of,

it's really great at the beginning.

00:59:21,125 --> 00:59:21,815

And then.

00:59:22,155 --> 00:59:25,125

I get handed off to their B team

because it's already a contract that's

00:59:25,125 --> 00:59:28,235

up and running and it's just, it's

incredibly frustrating for everyone all

00:59:28,235 --> 00:59:28,515

Rand Fishkin: around.

00:59:29,475 --> 00:59:32,605

Uh, so there's a number of agencies

I know in digital marketing world

00:59:32,605 --> 00:59:34,455

who specialize in doing exactly that.

00:59:34,525 --> 00:59:36,235

Their engagements are

literally structured.

00:59:37,255 --> 00:59:40,825

1 of 2 ways we can manage the whole

thing for you or we'll train your

00:59:40,825 --> 00:59:42,285

internal team to do what we do.

00:59:42,915 --> 00:59:43,505

We'll set it up.

00:59:43,545 --> 00:59:44,405

We'll work with your team.

00:59:44,635 --> 00:59:45,715

We hand it off in 3 months.

00:59:46,825 --> 00:59:47,655

Then you go run with it.

00:59:47,665 --> 00:59:48,945

You come back to us if you need us.

00:59:49,435 --> 00:59:49,595

Right.

00:59:49,595 --> 00:59:52,615

And I actually, I think that's

a great model to, um, trying

00:59:52,615 --> 00:59:53,375

to remember who's there.

00:59:53,375 --> 00:59:56,405

There's a Canadian woman whose

agency is all based around that.

00:59:56,405 --> 00:59:57,075

Dana D.

00:59:57,075 --> 00:59:57,565

Tomaso.

00:59:57,575 --> 00:59:59,445

Her agency is just exactly that.

01:00:01,475 --> 01:00:01,985

I'll plug an

01:00:01,985 --> 01:00:05,555

Tim Winkler: agency that that

we've found extremely valuable,

01:00:05,615 --> 01:00:07,395

uh, in terms of identifying.

01:00:07,595 --> 01:00:11,455

You know, offshore resources to

help us out for, for skill sets like

01:00:11,465 --> 01:00:16,765

SDR or, you know, uh, coordinators,

back office operations, types

01:00:16,765 --> 01:00:18,415

of, uh, types of skill sets.

01:00:18,415 --> 01:00:19,245

It's called shepherd.

01:00:19,855 --> 01:00:23,445

And so it's almost like a

staffing agency for offshore.

01:00:23,755 --> 01:00:27,405

And, you know, one of the biggest

challenges I think folks face when they're

01:00:27,435 --> 01:00:29,245

looking to engage in offshore resources.

01:00:29,575 --> 01:00:30,535

Where do I begin?

01:00:30,545 --> 01:00:32,675

You know, how do I sift

through the talent?

01:00:32,675 --> 01:00:33,775

It's, it's overwhelming.

01:00:34,105 --> 01:00:35,625

They do all of that for you.

01:00:35,625 --> 01:00:39,055

You know, you pay a finder's

fee, you pay a 25, 30 percent

01:00:39,115 --> 01:00:41,045

of that individual's salary.

01:00:41,045 --> 01:00:44,155

But you know, when you're, when you're,

you're, you're talking about some of

01:00:44,155 --> 01:00:47,615

these, some of these compensations and

areas of like the Philippines, it's,

01:00:48,105 --> 01:00:52,145

it's well worth that investment to get

a pre vetted resource and it's also

01:00:52,145 --> 01:00:53,825

creating opportunities for them as well.

01:00:54,225 --> 01:00:58,155

And I've always approached it with

the intent of like, I treat them

01:00:58,155 --> 01:00:59,445

like they're a part of the team.

01:00:59,445 --> 01:01:02,225

I treat them like they're an,

like they're an employee per se.