A month ago I started my podcast, and it has already become my all-time favorite project. The guests are just so interesting, candid and inspiring.
Our first episode featured Rand Fishkin talking about his journey to entrepreneurship. While there was a good number of downloads/listens of the podcast, I know that many people prefer to consume this content the old fashioned way (by reading).
So I commissioned a complete transcript of our conversation to share with the readers out there (and who knows, maybe it will help with that SEO thing that I hear so much about).
The transcriber did an amazing job of taking our 45 minute conversation and turning it into a document – 7,829 words of wisdom! After that, I have applied some more formatting and added click to tweet buttons so you can share quotes from the article.
So here is my interview with Rand Fishkin provided in its entirety.
Rand Fishkin Interviewed by Jeffalytics
Jeff Sauer: Let us look back to the beginning. I know that the story is that you drop out of college to join your Mom’s company which became Moz.
But even before that, when was the first time that you recall that you got somebody interested in something you had to sell or something that you could do?
When was the first time that you realized that you have a gift for getting people interested in products or services or anything that you do?
Rand Fishkin: That is a question that I have never been asked to before. When I was in high school, I volunteered at an elementary school through kind of a family friend connection.
It was basically a program where I was assistant teaching a science class to elementary school kids with a professor whose actually running the class. It was at a private school so I did not have to go through a bunch of hurdles at the time.
Or maybe it was totally illegal that I was there? I do not know.
But I remember in those classroom sections being able to get kids really excited about science specifically like Astronomy and Chemistry, a little bit of Physics, Geography and it was so much fun. It was a great experience. It made me want to create things that people paid attention to, that help them learn and see the world in a new way. So I think that was where the first time I can ever recall having that feeling.
Jeff Sauer: Excellent! And so seems like almost like academic learning where you just by being around people, you realize that you can get people interested in something where they might find it boring. Science is not always the most interesting topic but you found a way to go at it. And obviously for some people it is very interesting but for the average middle school students or the average student, they are like, “Oh Science, ok”.
Some of them will excel at it but a lot of them do not really know where to go about it. And so, that was great and this is really where I think a lot of us find that opportunity early on but I have but it was not always something that we put structure around. We do not really know how we make money off of it. How do we use it as a way to do anything? We just know, “Hey people actually cared about what was going on, people cared enough that we did this thing and I want some more of it.”
And I am guessing that you are more of it probably still happen in high school but then you know I really want to get into this college experience because I’ve read the stories and paper I’ve heard you talk about it before. But how does the college experience factor into this?
Rand Fishkin So I am going to be transparent and say I did not have a terrific experience in high school or particularly in college. That’s not to say that I didn’t enjoy my time there. I had fun but I was not engaged by the vast majority of my classes.
There were couple of exceptions asked ‘Oh this is really cool. I am enjoying it. Vast majority is not the case and I had started doing you know some web design and development contract work on the side for you know my Mom’s small business clients and that was really fun like making a website, building up these pages.
At the time, I was doing a lot of like animations and stuff like flash. And that was really cool to imagine, taking in information and conveying it across the web and having anybody be able to access it. And the web was really hot break like in 98-99 before the dot com crash. So that kind of led me from I should stay in school or I should get a finance degree and I should try and find a job with that to.
“Screw this whole thing. I’m going to drop out and just do this, this web design thing.”
And then, that didn’t actually go very well but it was the catalyst.
Jeff Sauer: That is interesting. So I think that it is the same, I started out the same way when in the middle of college I found people would pay me money to make websites for them.
And I was doing flash and just like you and got really into things. And as a young teen having people give you money to do something as your skills is a really interesting thing.
I think it creates two dynamics.
One is that it makes you think that this is going to happen forever. That as long as you have these skills, they are always going to pay you. And money is easy, that opportunity is always going to be there. But I think it can be a bad thing, that it is not great that we think that.
Because then, this other side happens what you’re talking about is if the website industry crashes or budgets get lower, then we realize that we’re working with really just a mastery of technology or a light mastery of technology where nobody else got it. We didn’t really develop a skill that’s sustainable in the long run or when you said that things didn’t go as well as you thought once you didn’t get into the business. Can you elaborate more about that?
Rand Fishkin: Sure. So we were doing primarily web design and building websites and the demand for that was fading, especially among like the small and medium business segment that were working with in the Seattle area. We had a handful of clients not more than a dozen.
We were unable to find new clients, and existing we were building stuff for became more unreliable with payments. More thinking about price. The competition was increasing because there’s a lot more people entering the web design business.
So we were really struggling. We went pretty deeply into debt between 2000, yeah I guess 2000 and 2005. And eventually kind of lead us down this path toward SEO.
So we had a few clients that we are working and building stuff. We’re building stuff on spec, like they didn’t pay us, we just built it and then we hope that the new website will help them convert more customers and then they pay us some percentage of the revenue which is honestly is a terrible model.
I think we did that four or five times.
Twice, we actually got paid anything, three times not really.
Jeff Sauer: That’s a really good lesson for us all to know is that working on spec or working for people who want to do a revenue share, it sounds great because of the top amount of money we can make.
We can make a lot more money that way.
But it almost never works out that way because the people who are if they are making a ton of money, are they really going to give you a million dollars?
Are they really going to give you two million dollars to do these things? And probably not because that’s just how business works in the most part. It’s not your money, it’s their money.
I learned that lesson as well. There’s a lot of people who do want to, they want all your time all your energy and all your value and they don’t want to pay for it unless it’s valuable.
Continuing on, the debt, I know that’s a really probably a tough piece of your life and that’s something that probably still haunts you in certain ways.
So that debt was basically market conditions – the market turned when you’re looking to do things. Did the debt itself go towards paying employees, did it go for office space, was it infrastructure?
Was there anything you would do differently now that you’ve learned because of that process?
Rand Fishkin: Oh yes. I mean, first of, nearly every expense that we had was non-necessary so I had marketing and advertising expenses, we had some web hosting and technology expenses.
Most of our expenses go of course to people and we did not need a fancy office space which we thought we needed to able to convert clients and we did not need, well you know what, we did not really pay our employees.
My salary for this five years was sixteen hundred dollars a month and even into 2006-7, there were plenty of months where I only got one of those pay checks for only eight hundred bucks.
And my mom wasn’t taking a salary at all. We had one programmer on staff, Matt Inman, who is now known as the Oatmeal.
So he and I used to like, stay at the office late and play counterstrike and just screw around, but he wasn’t making much at all either.
It was just rough, rough times.
So the debt went to pay mostly people even though those expenses weren’t that huge. And then the big problem was not, you know I think we had maybe a $120k to $130k in debt.
We weren’t able to make the minimum payments for a couple of months. And so then, you know the interest rates spikes up and you start getting penalties on top of that. So I think by 2005, we actually owed $500,000.
Jeff Sauer: That’s crazy.
I mean it’s great that you’ve come out from under that. But I think that’s a good lesson for everybody to know was that debt without, I mean ultimately, everything comes down to revenues, right?
You need to have some kind of path or some kind of understanding that you’re going to make enough money to pay off that debt. Otherwise, it’s not worth it to go into it.
I have a similar story myself. I was in somewhere around twenty thousand dollars in debt and I realize that I could only make the minimum payments, the only thing I’d ever be to do with my life is to make minimum payments and I never get ahead of it. I would never pay it off.
That was when I started freelancing as well, I mean that’s when I started to realize that I needed to do more. I needed to give up the TV. I needed to give up nights and weekends and make enough money so I can get ahead of the game.
Fortunately, for both of us, I think we’ve been able to turn it around since then, but I think that’s a valuable lesson for all of us. We need to have some kind of sign that there’s going to be something good coming out of this.
Otherwise, it’s not worth it to go into that debt. Because you think something might happen is, usually, it is a reason to stay in debt. Obviously, we want to get into how you turned it around but let’s continue on this path.
I wanted to ask you about Matthew and the Oatmeal. So, I have been following you and been in the Moz community for 10 years now. So, I read when you guys were, probably when you started to turn it around with that process. When you started building away from a web design agency, then getting into SEO and turning it around at a point. All the demand was there. You had so much demand that it would probably be difficult for you to capitalize on it.
How did you transition from doing project work or working on spec and not really necessarily having the respect of the clients? How did you make the change?
Rand Fishkin So really, it was the blog. I started with what was the SEO Moz blog in 2003, put it on its own domain on SEO Moz in 2004, and that blog built some popularity by 2005 and then into 2006.
And then I got invited to speak at a couple of conferences which I could barely afford to go to. I had to crash my grandparents place and it was pretty nuts.
But, that blog is what eventually drove customer demand. So it turned out that instead of us getting inquiries for web design clients, we’re getting inquiries for SEO clients.
Folks who wanted SEO in general, already had a website. They knew how they were making money from it. They had the money to pay for SEO. They want to improve results. They could see driving traffic from searches would get them a return on their investment and so they were looking to improve that. And that just meant better quality and a more on-time paying customers.
Jeff Sauer: That’s great. So SEO Moz to you at the time was just a blog, right? It was like, it was a dot org even. And you didn’t really have a lot of plans to commercialize it.
It was sort of just like, “Hey I’m going to try this. “ If we’re preaching to people that we need to blog about blog for SEO, I need to do it myself. I need to experiment with it.
If we are going to be recommending content, if we’re going to be recommending these things, I should be doing it myself. So, it’s sort of like an experimental area.
Question, what was the name of your company before SEO Moz was invented as a brand?
Rand Fishkin That’s something nobody knows. So my mom founded that company I think in 1981 and that was called Outlines West.
Jeff Sauer: Okay. Outline West and it was a marketing service company for the whole time until the digital era came around?
Rand Fishkin Yeah. It was a one-woman. It was just my mom doing it from 1981 to 2000. And then, I think even when I did it first year or so, I was kind of just a subcontractor.
So, it wasn’t until 2001 that I came to the business full time. She was the president CEO. I was just guy who makes websites.
Jeff Sauer: Fascinating. There we go we learned another new thing that nobody has asked you before. That’s great. I have been curious about that for years.
Another funny thing about your blog is that I used to read it and recite what you wrote to clients. I was very young and very, I didn’t really have much business sense. And even the post you wrote on How should you price SEO services. That was really helpful for me.
How Much Should You Charge for your Services, What’s the Difference between a Retainer and a Minimum? How much do you Charge per Project.
And so I used that a lot with my own clients and the funny thing is I was working with Fortune 100 type companies. But I was just what you were saying on Moz as to what their strategies should be.
I remember in a meeting, I said, “Here’s what we should be doing” and I showed them a post from Moz and they go, “Why don’t we just hire that Rand guy from Moz?”
And I was like, “Nooo! I can do this for you.”
I think that people did notice your site because it was the only way we could get straight answers to what you are looking for.
Now, I’m sure that alienated some people who had the answers but didn’t want that being public but for the majority of people and the majority of the greater good, it was an excellent resource to have all that available.
Rand Fishkin Yeah. I think it would be very hard to replicate at least in the SEO industry because the timing of it was such a big part of that.
So making the operations of search engines and how ranking worked and how specific tactic works or didn’t work, transparent at that time was not very popular. there was a few other blogs, obviously Aaron Wall’s SEO Book was very popular. It came out running around the same time that SEO Moz launched and those two resources were talked about frustratingly by many folks in the existing SEO community that time.
Because they were like, “Hey, this is trade secrets stuff. This is the kind of thing that we earn our living on. You’re not supposed to make it transparent.”
And I am really grateful to people like Danny Sullivan who recognized the value of that transparency and helped amplify it and broadcast it at conferences and try to make this less of a secretive world. And that’s what we are trying to do, too.
Jeff Sauer: I think that in retrospect, I can see why people resist change (especially if it’s something proprietary) but in the long run, the industry now, it is now an industry as supposed to just being a niche area.
And things only become an industry only when there is big enough market to support it.
The market has grown due to some of the efforts that you did as well as just being out there. So, I think that there is a lot of great things that have come out of this as the result of the things we do as SEO’s and people have practiced that.
So you have the blog and I always thought of it as an extremely high quality resource but the quality over the years has gotten better and better.
We have a much better CMS with engineers who work on the front end of that. You just can’t compare. You go back to the post from ’04, ’05, ’06, it was fine for the time. But you would not expect anyone to tweet or share or link to those kind of posts today.
Jeff Sauer: I think that is a good sign. I mean you have sort of ridden the curve of the evolution of what you need to do in a blog.
I think back in the day, just having a blog was enough. Just writing every day or every week was enough.
There are a lot of people that I still read today are the ones who are doing it consistently. They have just been around longer.
I think now to stand out, you need to not just be consistent, you need to be consistent and you need to really push hard on these other things that make you better.
You need to be the term that you have adopted – 10X content – in order to be noticed in the first place, because there is just so much out there. There are so many pieces of saturation that you need to do something different in order to stand out from a crowd.
Rand Fishkin Agreed.
Jeff Sauer: And speaking of something different to stand out from a crowd, I want to hear about the yellow shoes. I have read many articles about it and they say Rand is successful because he wore yellow shoes.
There might be some of that maybe that’s you need but from your perspective, what did that mean to you? Was that to be noticed? Was that to get people talk to you? Or was that just a coincidence?
Rand Fishkin It was to be noticed and get people to talk to me. Because I was going to my first conference in New York. That was 2005. And I have been on all these forums-kind-of chatrooms and all these stuff but with… my avatar was not a picture of me.
It was a picture of John Stewart from the Daily Show. So as if I was a Daily Show fan. And it is kind of ridiculous but I had this, “Oh no, I am going to go to this conference and see all these people that I have met online but I wouldn’t know them and they wouldn’t know me.”
So I made this post and said, “Hey, I found these yellow shoes next to the university where I was living in that shoe store. So I’m going to wear this to the conference and if you see me wearing them just say hi.”
And ten minutes after I walked in to the show in New York, Barry Schwartz from Search Engine Roundtable walks over to me and said, “ You must be Rand Fishkin. “
Jeff Sauer: Nice.
Rand Fishkin Or, “ You must be Randfish. “ because that was what I used on the forums. And we had a nice chat and we have been friends ever since.
And I have probably seen him in 2 dozen cities around the world. It’s crazy. It was not an intentional marketing tactic but then it became this association that people had.
So every year, I still I try to wear them to a couple of conferences. I always wear them at MozCon.
Jeff Sauer: That’s a great lesson on personal branding. I think now, we start to use twitter to meet people at conferences. But I think there is something to be said for finding an audience and giving them to pay attention to you or to at least notice you in some way.
So that is one way to do it. I think that it is tough to meet people at conferences even if you have read their stuff or met them before. Brilliant way to go about things. I know other people who have their calling-cards and that is how I know who they are when meeting in person. It works great.
So, let’s continue on this path then. You are publishing this blog and getting people to notice you, was there a turning point or a type of content, may be the whiteboard Fridays, what was it that really made it to the point where you are no longer concerned about getting there. When you realized that you got there as far as being noticed and being as popular as you would thought you would be?
Rand Fishkin Interesting. I mean Jeff, I still don’t think I am there.
But let us see, I would say there were definitely big turning points but I don’t think I recognized them as such at the time.
It is only in their reflection that they seem, that it feels like they have these massive impacts. But the two, I think one came out in or maybe they did both in 2005 actually.
So in 2005, we released two pieces of content that we’ve continued to maintain for the last 10-11 years and those were the beginner’s guide to SEO which I wrote personally. Now there is whole team of people who go and make sure that things are great and updated and all that.
But for the first one, I wrote the whole thing myself and published it on our blog thinking that lots of people would read.
We were featured in Newsweek magazine like literally the magazine that is on the shelves. It has big distribution but there weren’t honestly a lot of people who read that story but in my head I was like, “Oh my God, thousands of people are going to be coming to our website wondering about SEO. I need to write a beginner’s guide to SEO so people can learn this stuff.”
So you put that out for free and what actually happened was it got slash-dotted. So, someone submitted it to slash dot which at the time was like hacker news plus Reddit.
And it went to the top of that. It was on a bunch of other news sites. A ton of people linked to it and talked about it, sort of ranking on the first page for SEO and SEO guide, and learn SEO and all these things. And then, we released the ranking factors.
We had this searchenginerankingfactors.com. We are now on our sixth edition, we do it every two years. That first one was just awesome.
It had no correlations. We could not run correlations. There was no link data at the time, yet. Majestic did not exist. Open Site Explorer did not exist.
Jeff Sauer: Yahoo site explorer back then?
Rand Fishkin Yeah. And yahoo site explorer, exactly.
It was like just when google turned off the link command.But we put out that document that was like a survey of 75 common SEO’s and their opinions and we aggregated that data and collected that.
And that document was read by like hundreds of thousands of marketers and people in the SEO field over the next couple of years. So I think those two documents together kind of formed the basis for this reputation that Moz built.
They brought a lot of blog subscribers. They brought is a lot of client inquiries. They brought speaking invitations and conferences, just kind of a ball that kept rolling down.
Jeff Sauer: It sounds like what differentiated you, well, the first thing is that you differentiated.
A lot of people wonder why they don’t rise in the crowd and you just gave several examples of things that you did that are above and beyond what we expect we need to do to get noticed.
The yellow shoes is a great example. I had mentioned whiteboard Friday which I hope we can talk some more about, but I know but that is a good example too.
There are very few people doing weekly videos and putting their personality out there and you were, sort of, ahead of the game with that.
And then we are talking about the beginners guide. Trying to go after newbies is always a good way to go because there is more people who want to get into it than there are people who are super established. So it is either playing inside baseball or preaching to the choir by going to advanced documents or you are trying to expand the overall market, right?
You are trying to create a market for SEO which I think beginner’s guide helps there. I have sent it out to several people.
And then you have the ranking factors. I think these are all examples of what you call 10x content.
Going above and beyond with content.
So that leads to another question that I have and that is, “How much time went into this?” Because I think some people are concerned about 1) spending time on something and 2) not knowing if it is going to work or not, which is a very valid concern.
I waste a lot of time on things that I do not know if they are going to work or not. And other people are concerned about how do they promote it and how do they get in front of people. Is it worth it to do all this time?
Rand Fishkin It was worth it for us but I mentioned to you those two pieces of content that did remarkably well, right? Maybe we’d say, “Hey, those are ten times better than anything else it’s after at the time,” which yeah, they probably were.
But both of those were investments of weeks if not months of my personal time and then Matt was helping do the HTML CSS for them both.
Beginner’s Guide did not require very much coding, but ranking factors certainly did require some substantive, kind of design shops to get the least.
In each of those cases, you are talking about 2 out 3 people working at the company putting in weeks’ worth of work on speculative projects.
Projects that we have no idea if we are going to have an ROI. We just hoped that they would.
And we had many many other projects like that did not work, that totally failed both for clients and internally for ourselves. So, the thing about 10x content or trying to do that is you should anticipate that you are going to try five, six, seven things before you hit once.
Jeff Sauer: I think we should all strive to create content. What I tell my students in classes is that we all have one great piece of content in us.
We can all do it once – just like the first album for a musician. We can always be a one-hit wonder. It is turning in into a sustainable business or something that can keep on going. That is really the hard part.
But we should be spending our time and our effort if we want this to work especially for our own personal brand or our brand of our company. We can all do that one great piece and we can all have one good idea. We can all come up with one good idea.
And then from there, that is what marketing is as an organization. Turning it into something more sustainable.
That is what a company is versus what an individual is contributing.
Sounds like you have a lot of just, “Hey, I think this is going to work and I know that this is something that needs to be done and I am going to spend some time to do it. It takes time and effort and it is not a guaranteed that it is going to work.”
And then, I think that is a great transition into the next piece and that is… So you have a web design agency that was not doing well and we established why. And then you shifted, pivoted if you want to call that, into SEO services.
And then the business started rolling in – or at least the agency business seemed on the surface to be doing well in generating revenue.
But then you also realized that, SEO services was not your end game.
I want to talk about the realization that may be SEO services was not the right path for you. How did you go from services company with some tools on the side to a tool company with no services at all.
Rand Fishkin Yeah. So this was not… It was not very strategic.
There was not like a realization like, “Hey, if you go with the SAS business model, we get recurring revenue. It is valued higher by investors and the market and dadadada…”
None of that stuff. We did not know squat about any of those things. But, we knew that when we shared stuff, it sometimes did really well.
So, we wanted to share all these tools that we have built which all these tools like 6 or 7 really simple tools. Today you can get almost all of that for free somewhere around the web.
Well, we have this little collection that was very helpful. We made it available publicly.
But what we realized is that, “Hey, you know what? If we make available publicly our web hosting and like server cost and all that kind of stuff are going to spike up and we cannot really afford it. So we are going to have to gate one of those tools kind of behind them, behind the pay wall.”
We were like, “Okay so let us just make like $29 a month. You can PayPal it to us and then we will give you access. And we will just use the same log in system that we use for the blog already.”
So Matt built that. I think he actually built that right before he left Moz because he was doing his own stuff, like building a dating website and sold that off.
He essentially built that for us as he left Moz a little later that year in 2007. We launched it I think February of 2007. And we started driving all these people to the tools.
The freemium model for us was just scaling up. And by August that year, we were making as much money from the software subscription as we were from all our paying clients combined.
I kind of was like, “Oh my God! This is crazy.”
Jeff Sauer: So it was not even a decision. It sounds like the decision was made for you.
You know you are floating around almost half of a decade for you and this company and all this debt.
And then, suddenly, you found something that had growth that you could not even imagine.
Rand Fishkin Exactly. It is kind of like it grew on its own and became this big revenue channel.
And so, at that time, a couple of investors reached out to us, Kelly Smith who is with curious office in Seattle. He actually works for Starbucks in China now. He is an awesome guy and Michelle Goldberg who was a partner at Ignition Partners, a local venture capital firm.
They both reached out and sort of talked investing over the summer.
They were like, “Hey, this is really interesting. These models are very interesting. SEO seems like a cool space which we want to raise some money and do something. I did not know what venture capital was like when Michelle emailed me I had to google it.
“What is venture capital?” So, that was not very sophisticated at the time.
And we ended up chatting over the summer. At the end of 2007, November, they put in $1.1 million dollars and I became a CEO.
So before that, my mom had been riding the show but our new investors were like, “Well, we want Rand to be CEO.” So we had a long conversation about whether we wanted to take this money and shift the structure.
We just paid off our debt. I think we paid off our debt in June of ‘07. So we barely have gotten of debt. It was a tough decision but kind of put us on the path of Moz and the company that we became today.
Jeff Sauer: You know around that time, I remember seeing your announcement. I was as surprised as anybody.
I think many industry people sort of knew the tools were useful. A lot of the people that were doing SEO were using the tools and getting familiar with them. I was a paid member by then as well.
But to see that decision, it was like man. I think I second guessed it because I just did not know enough.
“Why is SEO Moz taking capital? What the heck are they doing here? Why are they doing this?”
And so, it almost sounds like it surprised you much as it surprised the rest of us. You just probably were a couple of months ahead of the game. And you sort of have more ideas to the finances and everything.
Rand Fishkin I mean I will be honest. The thing that really made me want to take the money and build the company was to create an alternative to Yahoo site explorer and the google link command.
And google taking away all their link information. And I had heard rumors that Yahoo was going to shut down site explorer as well – which they ended up doing like 2-3 years later – in 2010 or 2011.
“We don’t understand how google ranks pages and that is because we cannot calculate our own version of PageRank and we are relying on google. And we cannot see all the links and we cannot see which ones are followed and not followed. We need a link index.”
And so, I wanted to build the backend of google search engine, the index, and all the views and data and the calculations so that we can make the operations of google more transparent.
And I thought, “Hey, this tools thing is the way for us to add transparency to SEO and still make money.” I had and still have sometimes a very non-profit mindset and I am like, “No, no! Our mission is to help marketers. Our mission is to figure out how google works, like our mission is to help people understand all these stuff.”
Revenue is just a way that we are able to keep paying rent on our apartment while we do that.
Jeff Sauer: Revenue comes from doing good, as opposed to trying to squeeze it out of customers. So I think you are very transparent with the customers as to what they get and what is available in your product.
One of the things I have always thought, and you just confirmed it, is that the smartest move that Moz ever made was to create a metric that SEOs use as replacement for PageRank, using domain and page authority. Industry professionals using these terms when delivering an audit to a company.
It is so vital now to the industry that it is really hard to decouple that. And so it creates a stickiness with the product. If you are the metric that people use, then you have a customer base that really needs what is there.
I think that is a brilliant move in your part. Did you know it was a smart move? Did you plan on that happening?
Rand Fishkin Yeah. Moz rank was like the initial version of the app we managed to build. We built these data metrics over time, domain and page authority. And those just continued to be leading indicators well correlated with how page ranks or domain ranks based on link profiles.
Jeff Sauer: You know all these moves that you have made and all these things that you have done combined to creating a really well-respected company.
You have a great conference. You are very transparent with your finances so we can sort of see the health’s doing and you have gotten more rounds of funding.
So how did things changed as you sort of gotten these things that you were dreaming about before and as they are getting to be reality and things that are in front of you?
Has it created new challenges?
Rand Fishkin Yeah I mean. Raising capital puts you on an interesting path, right?
It takes away a lot of the options that many private companies have which is like, “Hey, let us be profitable and make money and have a great business. And if we are growing 20, 30 percent a year, that is awesome.”
It takes off the table selling the company at a sort of smaller price that might make the founders and employees happy but does not return ten times the investors’ money.
It takes off the table spinning down the company and trying something else like a model you have gone with or you want to do something new.
So, there is a lot of freedom and flexibility that comes with not taking capital like every path is open to you.
If you do raise money, you have two, well, three options.
Two, you can sell to another company. Hopefully, for some very nice multiplier on the capital that you have raised so that everyone makes money, not very often, add a number that means that the investors are the only ones who make money. Sometimes, investors and founders are a little bit rarely employs. So, sale is awesome but it can be very risky. I think we usually hear about and the type of news that we usually hear about the big huge awesome sales not about the 15 or 20 that same day that were not particularly great deals.
The third option is you can make a public offering, an IPO on something I have been asked to act for the New York Stock Exchange and the European Stock Exchange, as that kind of thing.
For many folks, that is kind of the dream scenario because oftentimes can maximize your revenue that way. For founders, sometimes, that is a dream because it means you get to stay independent although you are now a public company and subject to a lot of restrictions and requirements that private companies are not.
I think Moz is…we are kind of past the point of dying so that is nice to not be dying.
But it is not to say that something terrible could not happen, knock on wood. We had scary moments, many of them. But we are probably looking at a sale or an IPO in the next 5 to 6 years.
Moz is going to do about a little under $40 million in revenue this year, growing about 24-25% over last year. If our growth rate can get back up to may be 30-35%, 40%, then it is a few years from an IPO. And then probably operate independently.
I know Sara who as of now is our CEO. She is very passionate about becoming a public company because she does not want to be on to buy someone else.
Jeff Sauer: This is amazing really the progression going from the debt and web design to now you are close to becoming a publicly traded with nearly $40 million dollars in revenue, technology company. It is really a remarkable journey.
Rand Fishkin It is weird though because it does not feel very different because I still rent an apartment. I do not own a car. I walk to work.
Geraldine and I are not very financially stable. We are okay. I have a salary but we would love to may be buy a house someday. Seattle’s getting unaffordable way faster than my salary has risen.
So, yes, it is weird, right? It is weird to have all these great things happening around you, exciting things. But then, it does not affect daily life very much.
It is just still figuring it out, trying to uncover how search engines work and blog about it. And make better tools, make a better product for the customers. So it has been very similar to the last eight years. The last eight years, I guess, have all been very similar on that front even if the height of reach of the company has grown up.
Jeff Sauer: That is a lesson for all of us. Even if we want to get somewhere, once we get there, it is now always satisfying as you think. There are always new challenges and new opportunities.
It is all about being curious, always expanding in your skills and your opportunities as well.
We are almost out of time here. I just want to ask two quick questions and then we can go back to your business.
The first one is – what is the best advice you received along the way?
Rand Fishkin Gosh. I think the best advice that I received which we did not listen to and I regret it all the time is do not focus on growth, focus on customer happiness and low return first.
Get people who love your software to subscribe your software for a very very long period of time. Get them to love it and totally rely on it. Do not worry about trying to grow that audience massively.
Worry about trying to make the small audience very very happy and then grow slower.
Jeff Sauer: That is always good advice, right? Do not get too big for your britches and do not go overboard.
What is your best advice for somebody who is looking into becoming a digital marketer, get a career in this industry, and just to take advantage of all that this has to offer?
Rand Fishkin Well, it think the key to being a great marketer is empathy.
Being able to put yourself in the shoes of other people, other businesses, other people’s influences, other businesses’ customers, and to see the world from their perspective.
Because then you can really speak to what they want and need.
You can create the content that they need.
You can build and craft the messaging that would resonate with them.
You can be in the places where they are on and off the web and I think empathy at the core of great marketing.
Jeff Sauer: Could not agree more. I think that understanding what people are going through, and then having a solution for them is a great way to get our products and services noticed. I appreciate your time today Rand. Thanks for coming on.
Rand Fishkin Yeah. Alright. Awesome.
Jeff Sauer: Alright. Have a good one.