A Product Market Fit Show | Startup Podcast for Founders
00:13:22 · Pablo Srugo, Rand Fishkin
[00:13:22] S0: To what? Yeah, like 50 million ish [00:13:24] S1: When I left. So , no, it got to, I think it got to like a little over 30 million in 2014. And then essentially growth was slowing, got to like 40 million maybe the next year, a couple years later, and eventually got to 50. Okay . But it was, at that point it was growing, you know, sub 10% , um, year over year. So it really plateaued in, in 2014 , uh, I had a deep bout with depression and stepped down as CEO and promoted my longtime chief operating officer to the role. Um, and Moz was, I mean, I say struggling, like, it , it wasn't really, it was, I was like, you know, I was very upset that we were only growing 50% year over year at that point, either 13 or 14 had slowed to like 50%. And that was, you know , very upsetting to me. <laugh> , I remember , uh, Brad Feld , who had come in as our investor from Foundry Group was like, you're the best performing company in our portfolio. Like, it's okay. You're doing great, man. <laugh> , yeah , [00:14:21] S0: 50% of those numbers is, is meaningful , uh, revenue growth for sure.
00:14:21 · Pablo Srugo, Rand Fishkin
[00:14:21] S0: 50% of those numbers is, is meaningful , uh, revenue growth for sure. [00:14:25] S1: But we had entered the era of the unicorn, right? So , and we had raised another $18 million in 2012, which, so now, now we are really obligated to, how do we get to a hundred million dollars in revenue growing at 20% with 80% plus margins, right? That was like our, our, our goal. And we, the margins were quite high. I think they were even higher than 80%, which is great gross margin. But , um, the growth rate was slowing, and it was this like, nope , growth rates slowed too early. And so there were two competing opinions inside the business. One from most of the board , uh, and the new CEO was that SEO was tapped out. There basically wasn't enough of a market in SEO to build a a hundred million dollar a year company. And the other opinion, which, which was shared by myself and some other people, mostly lower down in the company. And , and the , on the SEO side of things was SEO is an absolutely huge market, but we're getting our lunch eaten by these other new competitors, and we need to start building better features and making the software more useful and updating the UI and all that kind of stuff. [00:15:27] S0: What were some of the big competitors coming up at that point?
00:15:27 · Pablo Srugo, Rand Fishkin
[00:15:27] S0: What were some of the big competitors coming up at that point? [00:15:29] S1: The two big ones were SEMrush and arus , but there were another, another 10 or 20 software as a service businesses that were all sort of, you know, nipping at heels and getting to the five to $10 million revenue size. But SEMrush, I think in, maybe it was 20 17, 18, somewhere around there, I think they went public and their numbers showed, you know, like $120 million in revenue a year. And they're way over that now. [00:15:51] S0: Yeah. What are they now? I'm just looking at a market cap , $2 billion company. There you go. <laugh>. So that was the opportunity. [00:15:57] S1: If I had been more persuasive and a sort of better CEO , um, and remain CEO and like done a great job, I, I think Moz could have been in a, in that position or a similar position. Right? Certainly in 2013, for example, if you were to survey 10,000 SEOs and say, what software do you use and what , what , what do you recommend most Moz would've been number one and M 20 18, 5 years later, Moz was probably number three. Um, and today, I don't even know if it's number five.
00:15:57 · Rand Fishkin, Pablo Srugo
[00:15:57] S1: If I had been more persuasive and a sort of better CEO , um, and remain CEO and like done a great job, I, I think Moz could have been in a, in that position or a similar position. Right? Certainly in 2013, for example, if you were to survey 10,000 SEOs and say, what software do you use and what , what , what do you recommend most Moz would've been number one and M 20 18, 5 years later, Moz was probably number three. Um, and today, I don't even know if it's number five. [00:16:27] S0: What do you think about, I mean, in your case, like you, you kind of get , you had your own personal reasons for, let's say, moving away from being CEO . Like now you've had like enough time to just think, think about all that. Maybe in , not necessarily in your case, but more generally, what was it like to not be the CEO of your, of the company you founded? Right. And I say that as someone who, we went through something similar to Jim Track . I was COO, so I wasn't CEO , but I co-founded with my co-founder, who was CEO . And at one point we transitioned, brought in a professional CEO . And I know for him it was almost impossible. He was just like, I can't, he, he ended up leaving like quickly. I was fine 'cause I was already used to that role. But it's like, how do you go from just, you have the final say, you know, every time. And sure. You delegate and all these sort of things to, holy crap, I don't have that <laugh> anymore. Like, it's tough, you
00:17:11 · Rand Fishkin, Pablo Srugo
[00:17:11] S1: Know , I remember having some conversations with , um, with the CEO after I had stepped down and was like, Hey, if the company we're doing great and you were overruling my decisions, I think I'd be like, well, hey, you know, she's crushing it, it's doing a great job. So I , I'll sit back and enjoy the ride. And if we were sort of on the same page and she were like listening to me and doing the things that, that we agreed were , were the best and the company wasn't doing well, I'd be like, well, all right , let you know. Let's put our heads together and keep, keep hammering away at this and try and come up with something. But the combination of that feeling not listened to and poor performance, oh , that is just, you know, emotional and, and psychological killer. So that, that really sucked. I think it sucked for her too. I don't, I think she had a terrible time. I don't envy her experience either. I, I don't think that was fun for anybody. So , uh, in 2018, I left , uh, Moz , I started, well , <laugh> okay, opinions vary. Pablo one kind toand interpretation is , uh, he was frustrated and felt like he wasn't contributing as much as he could. And so he left to go start another company [00:18:17] S0: Graciously. Yeah. [00:18:18] S1: Yeah. Yes. And another interpretation is , um, the leadership of that company was sick and tired of his and wanted him gone. <laugh> , um, [00:18:28] S0: Walked you to the door and you took the last step . Sorry , <laugh> . Yeah, yeah, yeah,
00:18:28 · Pablo Srugo, Rand Fishkin
[00:18:28] S0: Walked you to the door and you took the last step . Sorry , <laugh> . Yeah, yeah, yeah, [00:18:32] S1: Yeah. I think I wrote in, in the blog post that I wrote about my departure, which was, which was like the next morning on SparkToro's website , um, which I had started that night that , um, that post said on a scale of zero to 10, where zero is, you know, escorted outta the building by security, and 10 is like, everybody hugs and it's tears and happiness, and congratulations. My departure was like a four. [00:18:56] S0: I , that's common. I think there's few cases very common . I mean, like Google is one where they actually, you know, very much graciously gave it off to , to Eric Schmidt or whatever. But in general, CEO goes from CEO to not CEO , you know, again, the company has to do, I mean, Google <laugh> did exceptionally well. So I think everybody was pretty happy with that outcome. But yeah, I think in most cases it looks more like the gym track or, or like what happened to Moz where , uh, it's, you know , yeah, a three to five out of