Rand Fishkin founded the company that would become Moz with his mother in 2004. After beating off debt collectors and driving Moz to profitability, Rand made a mistake. While Moz is now the world’s most popular provider of inbound marketing software, things could have worked out very differently.
They were coming for Rand Fishkin’s house.
Having dropped out of college, just two classes shy of graduating, Rand had gone to work with his mother, Gillian. She was a solo entrepreneur doing consulting work. Her clients often needed websites. That’s where Rand came in.
Once these sites were built, the clients found they needed help with their SEO. He and his mother couldn’t afford to subcontract this work, and Rand began to learn the basics to try to help them appear on the all-important Google page one. Unfortunately these clients didn’t tend to pay on time for this help.
The missed payments began to stack up, the Fishkins “made a lot of bad business decisions”, and by 2003 they were nearly $500,000 in the hole. They’d borrowed about $150,000, mainly on credit cards, to help grow their business. The growth they’d anticipated didn’t materialise and they’d ultimately ended up working on low-ROI projects for a series of bluffers.
Most people would’ve been looking to quit at this point. Except for one thing. They hadn’t told Rand’s Dad.
Filing for bankruptcy would’ve put the family home in jeopardy and forced them to own up, so Rand and his mother decided to do what they saw as the easier option: make the money back.
“We just had to find a way,” says Rand.
“This SEO thing”
Rand started Moz as a blog when he was learning the fundamentals of SEO. He would write about different techniques and software he would use and share the content in an effort to attract clients. It eventually worked. The business started picking up more and more clients, clients who actually paid.
Word began to spread about Rand’s SEO chops and in 2005 a reporter from Newsweek magazine, at the time one of the US’s biggest publications, flew to the Fishkins’ Seattle home to feature Rand in a story. He remembers thinking, “Oh. Maybe this thing, this SEO thing, maybe that’s going to be what lets us pay off this debt and become a real company.”
He was just about right.
They stopped spending a fortune building small websites for small-time clients and began focusing on growing an SEO consultancy, using Rand’s blog to help attract clients. They were able to grow and pay off most of their debt in two years. They built tools and launched them on a whim as a software subscription. They’d never heard of the term SaaS, but each subscription brought $39 into their PayPal account each month.
Soon they were making as much from software as they were from consulting. By 2011, Moz, then called SEOMoz, was turning over $4 million+. Then Rand made a mistake.
“I started to believe I knew what I was doing,” he says.
Don’t let it go to your head, bro
Rand had Moz’s engineers begin work on a product that would become Moz Analytics. Rather than work slowly on a pared-back version of the software, then listen to customer feedback and iterate, Rand decided he wanted to go all out. “I had us build this giant, massive project. It took us two-and-a-half years to launch this piece of software. And when it did launch, it was a huge failure,” he says.
The product didn’t resonate with Moz’s growing customers base. While almost 80,000 people had registered to try it, few decided to sign up after. Users regularly encountered bugs and errors.
“I was broken in a tonne of ways. It was poorly designed, built, launched, and engineered. And poorly executed. Poor all the way around,” says Rand.
What Rand finds most disappointing about the ordeal is that it was avoidable. He says that things are made infinitely easier for any company when its CEO makes “even just a couple of smart calls”. Calls like launching smaller versions of major projects, even internally, on which to build.
“But I thought I knew better than everybody else,” says Rand.
Rand onstage at our US event, Collision, in April 2016
Is there a special, rare breed of people?
Rand feared for the product for almost a year before its launch. His engineers and CTO would plead with him that they were not working in a way conducive to building good software. These fears were placed to the side however. He thought that the bigger the product, the bigger the PR impact for the company. There was also an another factor: history.
Moz had already beaten the odds. From half-a-million dollars down, to eight times that figure in revenue, the company had been a success. Along that journey, Rand had come across reservations similar to those of his engineers and CTO. The company had designed products in a “black box” before – not showing anyone before the launch – and they had worked. These successes made it harder to listen to the naysayers.
“We’d had such great growth, in spite of everyone, especially a lot of investors, telling us that our products would never work and our company would never scale and the market wasn’t big enough. I thought we were this special, rare breed of people who just knew everything about we needed to build and didn’t need to do customer research,” says Rand.
The big regret is that he didn’t consult with Moz’s customers. He says that the key to running a successful company is to listen and to stay close to your customers. It’s crucial to be wary, or at least sceptical, of past successes. They’re not reliable indicators that you’ll experience success in the future, says Rand.
The pendulum swings
Things have changed with Rand since Moz Analytics’ launch. After learning a lesson, he says that he’s taken “the unbalanced approach of swinging the pendulum all the way the other way”. Despite Moz’s continuing success – the company hit just under $38 million in revenue last year – Rand can’t help but worry that things won’t work out.
“Right now I have no confidence at all. I assume that everything I think is wrong and has to be verified and validated. I assume that first versions of things won’t go well but we’ve just got to get them out the door and then see how they work and iterate on them. It’s not much of a balancing point,” he says.
Although glad to have survived the scare with Moz Analytics, a part of Rand misses the days of feeling that he could do no wrong. He says that it’s “way more fun” and that “mentally and emotionally, it feels better”. Doubting himself is truer to who he is though.
“Having that humility – I think that’s more of who I actually am. And even though that process doesn’t feel as fun, you remove a lot of the risk that your emotions will fall off a cliff with your new product,” he says.