A Product Market Fit Show | Startup Podcast for Founders
00:05:22 · Pablo Srugo, Rand Fishkin
[00:05:22] S0: <laugh>, maybe let's start with , uh, with kind of the origin story of Moz . Uh, you know, you were kind of running, you were in the SEO game already. You were doing more of a services type business. How did you transition that into what ultimately became MAs kind of the venture backed startup that, that became very well known , attracted a lot of venture capital , uh, and went on to be acquired. Let's [00:05:43] S1: See, I dropped outta college in 2001 and started building websites, essentially doing, doing web design for local small Seattle businesses , uh, alongside my mom, Jillian, who had been running a small business marketing and advertising consultancy, you know, sort of one woman shop here in Seattle for 20 years before that. So interestingly, you know, if you look at the, the kind of like foundation of, of what became Moz , uh, the company started in 1981. <laugh> , technically right? <laugh> . Um , but , uh, so that, that business kind of transitioned into a web design development business, which was failing miserably, racked up a ton of debt, did not do well, and then we couldn't pay our SEO subcontractors. And so we had a conversation, it was like, Rand , do you need to learn to do SEO and do that? 'cause we really need that money. And we promised it to them, but we can't afford to pay these, you know, these contractors. So dove into SEO and found it extremely frustrating , um, and very secretive, you know, that both the industry and the search engines at the time, what year [00:06:49] S0: Was this? [00:06:51] S1: 2000 2, 3, 4 ?
00:06:51 · Rand Fishkin, Pablo Srugo
[00:06:51] S1: 2000 2, 3, 4 ? [00:06:54] S0: Yeah . Okay. Really , [00:06:56] S1: Um , around that, around that era. So, you know, Google was the most popular search engine by oh four, but MSN , uh, Lycos , Salta , Vista info, c cobot , MSN search, you know , uh, ask Jeeves , like they were all still around. And so, you know, trying to, trying to do all this stuff. I think, in fact, one of the big catalysts for me, trying to kinda reverse engineer and publicize more about how search engines worked and start this website at the time called SEO Moz, I think that started in 2003, was my frustration with the fact that I had, I had gotten a lot of our clients ranking on most of the other search engines, Yahoo and MSN , and Ask , but not Google. Huh . And I was like, what is Google doing? Something's, something's weird, something's different, something's wrong. They don't, you know, they don't like the same things. They seem to have some, some other algorithm at play. [00:07:46] S0: Was the other stuff just, just, and this is kind of historical at this point, but was it just like keyword density? Like I remember there were like keyword clouds and <laugh> just weird things back then. Yeah .
00:07:46 · Pablo Srugo, Rand Fishkin
[00:07:46] S0: Was the other stuff just, just, and this is kind of historical at this point, but was it just like keyword density? Like I remember there were like keyword clouds and <laugh> just weird things back then. Yeah . [00:07:55] S1: Most of the, most of the keyword density stuff ended by the end of the nineties. Okay. Um, but so, so links were a huge part of search engine rankings by the , in the early two thousands. Keyword usage still mattered , um, but it was, it was quite simplistic compared compared to where it is today. And there wasn't a lot of user behavior that went into it , uh, which now today dominates most algorithms, right? Um , brand dominates a lot of algorithms today, so would've been really hard to try to try and rank anything in today's environment. But , uh, we struggled with Google quite a bit, and I started publishing on SEO Moz, it , it was originally on a different domain, but then, then moved it to the SEO moz.org domain. And that website, you know, my, my goal was like, I'm gonna be like the other m's I don't know if Pablo, you remember the early two thousands, but there was like a site called DMOZ , which HA was the Open directory project. There was a site called ChefMoz that was like open recipes. There was a site site called MapMoz . There was Open Geography information. There were all these different Moz websites. The [00:08:58] S0: Only Moss I know I think is Mozilla, that
00:08:59 · Rand Fishkin
[00:08:59] S1: That's, yeah , Mozilla was one of them as well, so , okay. Okay . So I think the only two that kind of survived that long era were Mozilla and Moz <laugh> , which is funny. Uh, basically I started publishing there and we earned quite an audience and that, that sent us some consulting business for SEO, which is what the business transitioned into . So it went from web design fully over to SEO. Uh, and then in 2007, we had built some software that we were using internally for ourselves to try and like, make our processes easier and better. Essentially. I, you know, I really wanted to share that with our community. All these people who were reading the blog. This was sort of a pre, it wasn't pre-social media, but it was pre popular Facebook, Twitter, LinkedIn, all that kind of stuff. And so I , uh, convinced our developer, Matt, to basically build a PayPal paywall on top of the software that we had behind the scenes. We launched that in, at the start of oh seven, and by the middle of that year, it was already doing more revenue than the consulting business. And that is not because the software was great. I don't think any, no one would say it had product market fit. Like it was, it was crappy little tools that, you know, were barely better than doing it manually. But everyone who was doing SEO was reading our blog. And so we had, we had the audience, and that audience first approach was just incredibly powerful, right? Because they knew us, they liked us, they trusted us. So when we published some software, they were like, oh, yeah, I can, I can do the same processes that the Moz folks have been teaching me and use their software to make some of them easier , uh, and faster. And there weren't a lot of, you know, web cloud-based solutions for , uh, doing SEO. There was no virtually no software as a service in that field at all. And Moz took off. So by the , uh, I think we did about $800,000 of revenue that year, maybe a little bit more, and more than half of that, like 450,000 of that was the software. And that's when Ignition Partners , um, and Curious Office came in and invested at 1.1 million, the TechCrunch. And , uh, w uh , Wikipedia numbers are wrong. I have tried to convince them to change them, but <laugh> , they're, they're like, we can't trust you. You're not a credible source .
00:11:14 · Pablo Srugo, Rand Fishkin
[00:11:14] S0: Who are you? Right? You're not relevant to this <laugh> , you just made the company. [00:11:18] S1: Yeah , yeah. Anyway, we raised $1.1 million, thankfully the cap table and like all the legal docs represent this accurately. Uh, and then basically off to the races, right? We, we used, we hired a couple of engineers , um, that I knew through my wife Geraldine. Um, she had, she had gone to school with , uh, with this really smart guy named Ben. And they built a, an index, a a link index of the web over the next year. And at the end of 2008 , uh, we launched that. It was originally called Linkscape. I think the product inside Moz is now called, I'm not sure what they call it, but it essentially crawls the web and, and shows all the links that point to all the other sites on the web similar to how Google does it on their backend. And of course, this was like a big innovation and, and challenging product to build at the time, expensive product to build. Um, although, you know, if you think about $1.1 million in today's world, you're like, what? That's no money at [00:12:11] S0: All. By the way. Like back then at that point, did you understand what you were getting into? Like, did you kind of have this idea of like, wow, this is really taking off. Let's go create a unicorn, let's raise some money. Or was it just kinda like one step in front of the other, oh, they're offering me money, bit of a no brainer. Like, let's
00:12:11 · Pablo Srugo, Rand Fishkin
[00:12:11] S0: All. By the way. Like back then at that point, did you understand what you were getting into? Like, did you kind of have this idea of like, wow, this is really taking off. Let's go create a unicorn, let's raise some money. Or was it just kinda like one step in front of the other, oh, they're offering me money, bit of a no brainer. Like, let's [00:12:24] S1: Take it. I'm very grateful. I don't think the term unicorn even existed. Like no one had used it yet. Um , there wasn't a focus on that. There was, you know, it was the venture capital world kind of that was left over from the late nineties. And so the, the idea was, you know, hey, build something big , eventually you're gonna sell it or you're gonna IPO But there, there wasn't a focus on an exact amount. I think a a billion dollar startup still felt semi ridiculous to most people, which was nice as [00:12:52] S0: It probably should. Yeah. Like that . Yeah. [00:12:54] S1: As it should, as it should. Even a hundred million dollar start startup should feel ridiculous to most people. 'cause the, the odds of that happening are so vanishingly slim. And it's, it's weird to me that we all talk about this thing that's less likely than most lottery wins. So I don't , you know , I don't totally love it. But anyway, so , uh, Moz , you know, basically from whatever, oh six to 2014 doubles year over year , every year. Hmm . Like , it just dun , dun , dun , dun , dun dun . And so gets to it goes [00:13:22] S0: To what? Yeah, like 50 million ish