The VC industry resembles an 'insane game of high-stakes craps in a Bond film, only with nerds'.
So writes Rand Fishkin, the controversial founder and former chief executive of SEO software platform Moz, in a new memoir that is one part an educational textbook on the high-tech startup world and one part a behind-the-scenes explanation of his time at – and eventual fall from – the company.
Fishkin’s book, Lost and Founder: A Painfully Honest Field Guide to the Startup World, followed his long-expected departure from Moz earlier this year. The memoir – along with the recent announcement of his new martech company, SparkToro – heralds a new era in the niche but important search industry.
Moz, which was once one of the most-recognised brands in the digital marketing software world, is now fighting numerous global competitors that had entered the market and overtaken the company during Fishkin’s tenure.
“Just a few years ago, there was one major small business SEO platform player with Moz and a few enterprise platforms like Conductor and BrightEdge,” John Doherty, a former Moz associate while he was with the UK digital agency Distilled, said.
“Now, we have Moz, SEMrush, Ahrefs, and a multitude of more tools that are chasing each other for feature parity,” Doherty, now the founder of Credo, a service that connects businesses with digital marketers, continued. “The old days of hacking together tools because nothing else existed are gone, and we're playing in a mature ecosystem that makes the industry more accessible.”
For this column, I interviewed Fishkin and contacted numerous former employees of Moz from various departments. Those who were critical of Fishkin and Moz declined to comment on the record. Those who were positive did. Moz’s current chief executive, Sarah Bird, acknowledged my inquiries but did not respond further. For more background on organic search itself, I invite you to read this prior column.
(Disclosures: I contributed posts to Moz’s blog and spoke at the company’s conference in 2016. SEMrush, a competing platform, invites me and a few dozen other people in the marketing industry to a private, annual summit each year. None of this influences my columns.)
Everyone is writing a memoir
Writing negative memoirs about Silicon Valley and one’s time in the high-tech startup world has become the new big thing.
In 2016, Antonio García Martínez wrote Chaos Monkeys: Obscene Fortune and Random Failure in Silicon Valley and Dan Lyons published Disrupted: My Misadventure in the Start-Up Bubble. This year, Corey Pein released Live Work Work Work Die: A Journey Into the Savage Heart of Silicon Valley. (A prior column of mine did something similar.)
What the two latter books have in common is the use of the Hero’s Journey of mythologist Joseph Campbell – a brave individual embarks on a journey into the unknown abyss, sinks to a nadir, and then transforms into a wiser person who survives and returns home to tell the tale.
Lyons lampoons his prior company before discussing age discrimination and the growing gap between the rich and poor. Pein portrays the lives of people trying to strike it big in a San Francisco that is no longer built on rock and roll but on high-tech startups – and he ends his tale with a warning of the streak of elitist totalitarianism within that world.
In contrast, Fishkin’s book is the first that that is not a polemic. He takes a few shots at venture capitalists, but his main goal is to educate people to learn from his successes and mistakes and understand the best practices to run and grow a high-tech product startup.
Transparency is also trendy
I have never understood why high-tech startups publicise themselves as being “transparent” to the outside world. It barely affects the brands and is almost always bullshit. (I do not care if you post the salaries of your employees online – just create a delicious candy bar or build a useful platform.)
Most companies release information that only helps them. It is not a good or bad thing – it is merely realistic. I could describe the numerous times that self-described “transparent” companies have refused to comment or provide specific information on something potentially negative into which I have inquired. I am a realist, but I hate hypocrisy.
But for better or worse, Fishkin is the business person who I have met who is the closest to being as transparent as possible.
At the lowest points the book, he talks about being chased by a debt collector in 2005 for $500,000 while transitioning the digital agency co-owned by his mother into what would become Moz. Later, after major product failures led in part to his resignation as Moz’s chief executive in 2014, he writes that he had become “a frail, former CEO who’d lost his job because he couldn’t handle the stress and pressure and caved into depression.”
In the past, Fishkin’s admissions might have made him unemployable in the future. But while I was reading his book during a week in which Anthony Bourdain and Kate Spade died from suicide and discussions of mental health have become acceptable and encouraged, his frankness was refreshing and sympathetic.
Whatever one might think of Fishkin, it took guts to write that chapter because he did so long before those celebrity deaths brought the issue to the forefront.
The historical background
Any discussion of SEO software needs to start with the birth of search.
When the public internet gained widespread adoption in the 1990s, enterprising individuals realised that people could use search engines to find material online. As a result, platforms including Yahoo, AltaVista, and Google arose. SEOs helped websites to appear highly in search results and thereby increase traffic.
Almost 25 years later, many traditional marketers and senior executives still do not understand the importance of search engine optimization.
“Unfortunately, senior management still doesn’t fully understand yet the importance of organic search for their business,” Searchmetrics founder Marcus Tober said. “In many cases when a significant drop in organic search happens – following projects such as relaunches or content updates or HTTPS migrations – there is aimless activism, and SEO suddenly becomes a high priority. I would like to see organic search viewed from the beginning as a strategic play.”
The beginning of Moz
In 2003, Fishkin was a University of Washington dropout who had developed an interest in SEO while working at the family agency. He started to blog about the industry and created the SEOmoz website – which would later be rebranded to Moz.
Fishkin’s popularity increased after Newsweek featured him and Slashdot forwarded a lot of traffic to his first Beginner’s Guide to SEO in 2005. He and his mother transitioned to building and offering an SEO product. In 2007, Fishkin started to sell access to the agency’s proprietary tools for $39 a month.
“Rand Fishkin showed the SEO Industry how to grow up,” Ken McGaffin, a strategic marketing consultant at Majestic, said. “His plain-speaking Whiteboard Fridays [series on Moz’s blog] lifted the fog that clings to the industry and attracted not just SEOs and inbound marketers but a much wider audience of entrepreneurs, marketing and PR agencies, and publishers.”
Fishkin became one of the leaders of the SEO world because of his writings and charisma. He appeared at dozens of conferences each year and built a celebrity status to the point where he had a line of people wanting to talk to him after every speaking gig. Fishkin also grew a famous moustache for three years to an absurd hipster length as part of a promise not to shave until Moz was profitable.
“The things I loved to do the most – helping people, writing, speaking, building community – were the marketing channels that enabled us to attract customers and serve them well,” he writes in his book. “Even though our first product wasn’t great, we had branded ourselves as trustworthy operators in a field where that had historically been rare.”
But the problem was the product.
However, the primary lesson of Moz – at least so far – is that no amount of good marketing can cover for an inferior product for very long.
“Marketing has never been our problem, at least never for long stretches,” Fishkin writes. “The hardest nugget for us to crack has always been the product itself and the technology underlying it.”
The reason? Fishkin and his co-founder mother had no programming or software development experience. “I’m not a software engineer, so I couldn’t even properly assess what had gone wrong,” he writes in the context of addressing a significant problem with the platform.
Aaron Wall, one of the first generation of SEOs who also vocally criticized Fishkin in 2008 for publicly alleging that a competitor was manipulating search results for “SEO company,” thinks that the lack of technical ability of Moz’s co-founders is what led to the rise of competitors.
“The two big winners over the past few years in the SEO space have been Ahrefs and SEMrush,” he said. “Ahrefs and SEMrush were founded by programmers. Being bootstrapped and having those deep technical roots gave them big leads over other players in the field.”
Over the years, Moz had several products and features that were delayed for months, plagued with bugs, or wastes of money that resulted in relatively few additional customers. The company was selling eight different things and missing revenue projections for all of them.
Moz had slowing growth and was losing money. Fishkin was also helping his wife, who had developed and then recovered from a brain tumour. Eventually, he came down with severe depression.
In 2014, he stepped down as CEO and became an individual contributor at the company. COO Sarah Bird became the new chief executive. But Fishkin’s supporters say that the impact of his overblown.
“The toll of Rand's depression was far harder on Rand himself than it was the company,” Cyrus Shepard, a former director of audience development at Moz who remains a personal friend of Fishkin, said. “Through it all, he stuck by [Moz’s] TAGFEE core values and continued to lead the company with generosity and compassion.”
“Rand has been very open about his challenges and the difficulties he faced,” Shepard, who now runs the SEO agency Zyppy, continued. “But if we're scoring CEOs of venture-backed startups, I'd personally place him in the top 10% to 15%.”
Fishkin’s departure did not reverse the company’s fortunes. In 2016, Moz laid off more than a quarter of the staff, closed several products, and changed its longstanding strategy. (Fishkin discussed the event in detail here.)
And that leads to today.
The state of SEO software
So far in 2018, OnCrawl won the best SEO software suite category in the European Search Awards, Marin Software won The Drum’s Search Awards, and Conductor was acquired by WeWork. SEMrush received $40 million in funding two months ago and won both the UK and US Search Awards in 2017.
“When analysts look at our industry, the first thing they notice is that there are too many small companies that solve only small part of the problem,” SEMrush chief strategy officer Eugene Levin said. “We noticed it four years ago, and since then we have building an affordable solution that can help customers solve all problems related to their online visibility.”
Levin’s comment is intriguing because Fishkin writes in his book that Moz Analytics, his company’s attempt to become an all-in-one digital marketing platform, was a failure. Fishkin had surmised afterwards that the SEO world would rather use multiple small tools rather than a single large one.
“I think SEMrush and Ahrefs in particular have very bright futures ahead (Conductor, as part of WeWork, as well),” he said. “They're building products people want, and they've done a solid job of growing fast and delivering good data. I think if I had kept Moz focused on SEO software exclusively in 2012 and 2013, we would have been in a similarly fast-growing, impressive position.”
And what is Moz’s biggest challenge? According to Fishkin, it is “turning a large ship quickly in a field that demands quick change”.
“SEO tools and metrics are still really tough for many people, even SEO professionals with years of experience, to wrap their heads around,” he said. “If Moz can become the toolset that's easy to learn, understand, and take action from, it's got a shot at returning the capital its investors need.”
Shepard sees a bright future for Moz.
“Sarah Bird, the current CEO, is a passionate, smart, and well-loved leader,” he said. “Moz reached profitability last year, and to the best of my knowledge, they continue to perform strongly. The rest of the Moz team – including the SEO brain trust of Russ Jones, Dr. Pete Meyers, and Britney Muller – continue to kick butt and contribute to innovative products such as the new Moz Link Explorer.”
The Hacker News of digital marketing
On the last day of February 2018, Fishkin announced that he had left Moz – remaining only as the chairman of the board and one of the largest shareholders – to start SparkToro with cofounder Casey Henry.
“We're focused on solving an audience intelligence problem - namely, how to uncover the publications, sources, and people to which an audience you want to reach pays attention,” Fishkin said. “The eventual product will help surface the podcasts, YouTube channels, social accounts, traditional media, blogs, websites, and so on that any given audience engages with, so marketers can better target their efforts to those sources.”
SparkToro recently launched its first, free product – SparkToro Trending – which aims to be the online marketing world’s version of Hacker News, the top news aggregation and community website in the tech world, after many prior attempts by others had failed.
“SparkToro Trending uses Twitter as the source to uncover what web marketers are talking about at any given time,” he said. “The algorithm weights votes based on the quality of shared content from a Twitter user's account, then pushes to the top those pieces that get the most shares/engagement in the web marketing world on Twitter.”
Lost And Founder is a success
Within the SEO world, Fishkin’s book is already trending.
Fishkin is introverted and hates direct sales – it is why he prefers to market himself and his companies by demonstrating knowledge and letting that speak for itself. While I have my doubts about the long-term efficiency of content marketing, Fishkin should consider his book to be a success based on his own criteria. It could be an extremely long blog post.
As far as software product teams, Rand recommends that they learn from his mistakes. “Be the absolute best in the world at one thing for a very long time, until you're the runaway, near-impossible-to-catch leader,” he said. “Then, and only then, consider branching into other fields.”
Fishkin also warns against pursuing reckless growth hacking. “An addiction to finding the next great ‘hack’ dissuaded us from the long-term product and marketing investments on which we should have focused,” he writes. (In a prior column, I agreed.)
Throughout the book, Fishkin offers advice on additional issues including the pros and cons of accepting investor funding and the positives and negatives of startups taking on the personalities and cultures of the founders. At the end, there are “cheat codes” on topics ranging from branding to market validation.
Rand Fishkin today
Now, as Fishkin embarks on building a brand-new company, he says that he is doing much better.
“I sleep better, I'm healthier, I'm definitely happier,” he said. “I certainly always fear a return to depression – it's something that stays with you for a long time, maybe forever, but I hope that by focusing on my behaviors and crafting professional and personal environments that are conducive to good habits for me, I'll have the best shot of staying emotionally healthy.”
And how would he summarise his time at Moz?
“Spent a few years floundering, a few years learning and growing, and then a not-so-great end that was entirely my own fault and of my own making,” he said. “Hopefully, I can carry those lessons forward into the next business.”
Note: My interview with Rand Fishkin was too long to include everything in this column. The full discussion – which touches upon topics such as GDPR, brand purpose, VCs, tactical and media mixes, and open offices – is available here.
The Promotion Fix is an exclusive biweekly column for The Drum contributed by global marketing and technology keynote speaker Samuel Scott, a former journalist, consultant and director of marketing in the high-tech industry. Follow him on Twitter and Facebook. Scott is based out of Tel Aviv, Israel.