#404: How I Paid Off $500,000 in Credit Card Debt, Then Started a Business with $35 Million in Revenue, starring Rand Fishkin

Welcome to the final episode of our September sabbatical series! If you’ve been listening to the show for a few years, you know we’ve entered our September sabbatical, where the team is taking a break from producing podcasts and streaming some of our favorites from the 400+ episodes we ‘ have been released to date.

FIRE is based on four pillars: financial psychology, investment, real estate and entrepreneurship.

In September, we air four weeks of episodes focusing on each of these four pillars. Today we are airing an episode focused on entrepreneurship.

When Rand Fishkin was 25, he had $500,000 in credit card debt.

Less than a decade later, Rand was the founder and CEO of a company that had annual sales of $35 million.

In this podcast episode, Rand shares the story of hitting his financial low and making his ultimate comeback.

The saga began in 2001, when Rand, then 22, dropped out of his final year of college to develop a business with his mother.

Her mother, Gillian, owned a small marketing business that helped local businesses with things like posting ads in the yellow pages. (If you don’t know what it is, ask someone over 30.)

Rand had an early entrepreneurial streak and spent the late 1990s and early 2000s working part-time for his mother’s company. By his senior year, he was ready to dive full time.

Both Gillian and Rand realized that the Internet was more than a passing fad. Households were switching from dial-up modems to broadband connections. Customers were more interested in websites than Yellow Pages ads.

The mother-son duo decided to start designing websites for local businesses.

From 2001 to 2004, they hired contractors, rented office space, manned booths at conferences, and bought advertising. They paid for most of this with personal credit cards in Rand’s name.

By 2004, they had racked up $150,000 in credit card debt. Then they defaulted. They could no longer make the minimum payments.

Interest and late fees drove that balance up to an astronomical $500,000.

They decided not to declare bankruptcy. Instead, they took a two-pronged approach: Rand’s mother spent the next three years negotiating with creditors, getting much of the interest and late fees waived in exchange for payments on the balance of the capital. During this time, Rand focused on growing the business.

Many of his clients needed help with a specific aspect of Internet marketing called search engine optimization or SEO. Rand started researching SEO tactics and started a blog to share his findings. This blog attracted new clients and Rand quickly developed a reputation as an SEO expert. He started a company called SEOMoz, later renamed Moz, to offer business consulting services.

After a few years, his company also started developing and selling SEO software tool subscriptions.

By the time Rand stepped down as CEO, the company had raised multiple rounds of funding and raised $35 million in annual revenue.

But there is a difference between the profits of a company and the personal income of its founders. Today, Rand and his wife still have a liquid net worth of less than a million.

How did Rand go from being $500,000 in debt to becoming the founder and CEO of a successful eight-figure company?

Why isn’t he a millionaire yet?

And what lessons about entrepreneurship and finance can he share with the world?

Find out in this podcast episode.

PS Rand’s wife, Geraldine DeRuiter, is a hilarious travel writer and a former guest on this podcast. You can listen to his interview in episode 77.

PPS If you want to learn more about creating a blog, check out this free tutorial.

Resources mentioned:

    • Email Rand at rand(at)sparktoro(dot)com
    • Sparktoro.com
    • Rand on Twitter: @randfish — He has 408,000 followers and tweets 40 times a week.

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