How Rand Fishkin Built Moz, in 7 Steps
Rand Fishkin was speaking to a room of 200 people in Seattle on “Risk”, and slowly I realized he was telling us how to be an entrepreneur.
Revised and re-published on Feb 6, 2017.
At CreativeMornings/SEA, a monthly meetup for the design and creative community in Seattle, I heard Rand Fishkin speak, along with 200 other people. He’s the founder of Moz, one of the best companies here in Seattle. Everyone I meet who works there or formerly did, speaks very highly of Rand as a person, and Moz as a company.
Moz started in 2004 as an offshoot of his mother’s consulting agency. I could have these numbers wrong, but if I remember correctly from his talk. Rand told us in 2007, Moz had $200,000 in revenue, in 2008 it had $1.2 million in revenue. In the last calendar year, 2015, Moz had revenue of $40 million dollars. Moz does SEO, or Search Engine Optimization. They help clients understand and improve their rankings on Google and other search engines.
One motivation to go was to meet Rand in person, as he is one of three doppelgängers in Seattle sporting a handlebar mustache.
All resemblances aside, Rand inadvertently shared seven crucial lessons on entrepreneurship and what you need to be an entrepreneur. Here’s how Rand Fishkin built Moz into a $40 million business.
1.
He wrote.
Moz owes its existence to some blog posts on search engine optimization (SEO), which Rand wrote while he worked at his mother’s marketing agency. In those early days, Rand kept a habit of writing once a week. Something. Anything.
He continues this habit today. Moz publishes a weekly blog about SEO. Their blog is very active—every week, the company publishes short video teardowns on a topic in SEO.
How important was writing to the success of Moz?
Rand told us how Moz collected their first large institutional venture capital. For months, Rand would go knocking from VC firm to VC firm and be rejected. Frustrated by the experience, he wrote a post called “Misadventures in VC Funding”.
https://moz.com/rand/misadventures-venture-capital-funding/
His wife, Geraldine, who writes an excellent travel blog, made a reference to her husband's “Misadventures in VC Funding” post on her blog. I can’t find the link on her blog, but it’s on there somewhere. One of the readers of Geraldine’s blog was the wife of a very famous venture capitalist. She shared it with her husband.
That man was Brad Feld, the managing director at Foundry Group. He was impressed by the post and the Moz business, he called up Rand and invited him to Boulder, Colorado. Within a day, Rand had a verbal agreement that Foundry was going to invest, and soon thereafter, Foundry led a $16 million fundraising round of Moz.
The founding and funding of the business. All because he wrote.
2.
His family life was messed up.
This is probably the most controversial thing I’ll write in this piece. But allow me to explain, as Rand explained it to us.
Before I go into Rand’s story, I want to share an observation of mine. It’s downright scary how many successful entrepreneurs I’ve read about, or met in person, who had to fight one or more serious demons in their personal life.
Steve Jobs and Larry Ellison. Both adopted.
James Altucher. Divorce. And More.
Someone I know here. A rare medical condition that almost killed him.
Rand’s mother Gillian started a marketing consulting company in 1981. It never made much money.
When Rand’s father would complain about how Gillian wasn’t making much money (not unlike the painful conversations I remember listening to as a child in my house growing up), Gillian would write herself a check from her company. Just to show there was take-home pay from the business.
But the reality was Gillian and her company were in debt. The company owed about $20,000 to creditors. Nothing too serious, but not a great situation either. She wasn’t making money in her business. I forget the exact years, it could have been 2003 or 2004, but at some point the company’s debt ballooned to $100,000. And she was unable to pay the debt and soon, with interest charges, it went to $500,000.
She couldn’t and wouldn’t tell Rand’s father, about this debt or how her business was failing. Gillian was too proud, she cared too much about her family to let it tear the family apart. Only Rand, her eldest son, knew the truth. So Gillian hid this information from her husband. For years.
The pain Rand experienced from this secret was so great, not only did it tear his family apart, it also drove Rand to question anyone and anything in the world that was hiding something.
Rand told us he “took his anger out on Google”, leading to laughs, who were famous for hiding their algorithm for how they ranked search results. Rand made it his personal mission to uncover how Google did their rankings, and share it with the world. As it turned out, lots of people were willing to pay Rand for his knowledge, to help them improve their own search rankings.
About 2 or 3 years ago, Rand’s father found out about how his wife had hid a mountain of debt from the family. Rand didn’t give details about how his father found out, but because of this incident and other things, Rand and his father are not on speaking terms today.
I wonder if Rand would give up everything — the $40 million business, the office in Downtown Seattle, the successful company, if it meant he could have a normal relationship with his father again…
3.
He took risks.
Rand and his mom were sitting on $500,000 in debt. With that kind of debt, “you are going to start thinking, and thinking fast about how to cut expenses and make money.”
Most people aren’t comfortable or willing to take that kind of risk. Most people are content with their $45,000 annual salary and a little bit of debt—in exchange for certainty and stability.
I’m not saying you must take out a huge loan to become an entrepreneur. But you do need to start taking on risk.
Maybe it’s moving to a new city. Or quitting your day job with just $3,000 saved in the bank. Or cold calling businesses to validate your idea.
If you can’t get comfortable with risk, you will never take on the risks necessary to succeed as an entrepreneur.
On the topic of risk, Rand shared enlightening stories from his own experience.
First, there was the time when his company was in serious debt and he knew a collector was coming to repossess the furniture in his office. Before the collector got there, Rand hired these two burly guys to sneak into the office on a Saturday and move out all the furniture. But, there was a security guard in the building that day. So they had to move out all the furniture from the office without the security guard ever noticing. They did.
Then there was another time there was a different debt collector, who in Rand’s words, was a “fat, hairy-chested man, big enough so you knew he could beat you up,” who showed up one day at the office where he and his mom worked.
Rand meets the debt collector at the door, and the debt collector, in a gruff voice asks, “Where’s Rand Fishkin?”
Rand looks at this man straight in the eyes and says, “He’s not here.”
Thinking he outsmarted the debt collector, Rand goes home and his wife isn’t back yet. He hears a knock on the door, and assumes his wife has come home.
Rand opens the door and instead of his wife, it’s the debt collector.
“Funny stuff you did earlier,” the debt collector says to Rand.
Rand looked at him stone-faced. The debt collector handed Rand a stack of papers and says “Rand Fishkin…You’ve been served.” Rand was notified he was being sued for nonpayment of debt. These were dark times for him, but times where he took enormous risk.
4.
He paid himself last.
In the early days, when he and a friend were working for his mom’s marketing company, his mom didn’t have enough money to pay them both every month. So she alternated whom she would pay each month. One month it was Rand, one month it was his friend…
Rand and his friend knew the company was strapped for cash, and they were both humble about it. On the Friday that Rand got the check, he would go hang out with his friend, smoke weed “before it was legal”, order take-out, and play video games.
When they were both relaxed, Rand would say to his friend, “You should really take the check this month.” And his friend would say, “No, it’s okay, you take it.” But Rand would insist, “No, you should get paid every month. It’s my mom after all. You take this check.”
Rand paid himself last. An entrepreneur’s payday isn’t a paycheck from the business, it’s the value in the business. Deliver value to your clients first, then pay your employees, then pay your bills, then pay yourself.
5.
He started small.
You don’t build a great company, or any company, overnight. Start small, with the little wins.
In Rand’s case, he and his mom did SEO consulting for a few early clients. In Rand’s words, they did “some great work” to boost the public search engine rankings of these companies. (He didn’t share the names of these companies).
Find a client who will hire you for something you can offer. Do a good job.
Then find another client who will pay you to do the same thing. Do a good job again.
I’ve done exactly that with usability studies. Every time I do a usability study, I get better, I get smarter, and most importantly — I get more confident in my abilities.
Start small with a few businesses first. Then you’ll begin to see where the real opportunities lie.
The parallel is if you have a consumer-facing product as an entrepreneur, go out and find a few early testers, and get the experience right, before introducing your idea to a larger audience.
6.
He sold things young.
To support himself in college, Rand took a job that paid him $4.75/hour, at Wizards of the Coast, a game store known for popular games such as “Dungeons and Dragons” and “Magic the Gathering”.
This was around the time Pokemon cards were very popular. Rand had an idea. He decided to use his employee discount at the store to buy Pokemon cards on the cheap, and then sell these cards on eBay for a small profit.
I remember setting up a similar scheme as a middle school student. We would buy Showdown cards, a popular baseball card game on the Internet, maybe 20 packs at a time, at a price of $2.25 a pack, and then sell these cards to kids in our middle school for $3 a pack. And take the 75 cent profit to the bank.
It might sound insignificant, but for Rand, the $4.75/hour salary along with the sales of these Pokemon cards (he must have sold thousands of Pokemon cards) helped him pay his semester’s tuition in college.
I’ve sold study guides to students. I’ve sold textbooks in college for students who didn’t want to deal with their old textbooks.
You get comfortable selling. And the primary job of any business is selling. Even if you’re not selling a product, you’re selling an idea.
7.
His mom did it first.
There is a famous line in Harper Lee’s seminal 1960 novel, To Kill a Mockingbird, where Atticus Finch is being quoted as saying, “You can choose your friends, but you sho’ can’t choose your family.”
In Rand’s case, he was lucky that he couldn’t choose his family.
His mom Gillian had been running a marketing consulting business since 1981 (Rand is proud of this fact, he said his mom’s company has been around almost as long as Microsoft. “We were the first Seattle Startup!” Rand exclaimed).
Gillian had years of experience working with small businesses. When the Internet came around, she started helping her clients build websites, and hired Rand to help with the work. It was there he discovered these clients wanted to boost their SEO but they didn’t know how.
Rand succeeded because of the years his mom put in before he came around.
We internalize the best and the worst of our parents, because we spend so much time around them while growing up.
In this case, Rand internalized lessons of how to run a consulting business from his mom.
The best shooter in the NBA right now? His dad was an NBA player.
The best salesperson I know? His mom did sales for 30 years.
The best communicator I’ve met? His dad was a lawyer.
By that logic, I’d be great as a school teacher, and great as an engineer at a big company.
But I don’t want to be those things. I want to be an entrepreneur and a consultant. So I’m not sure how that will work out.
I think Rand’s success would surprise no one more than Rand. There were so many times that the business could have failed. But everything managed to work out in the end, through all the ups and downs.
It didn’t happen overnight, he started with a few small clients, he kept up a habit of writing on the topic weekly, he took risk, and he got lucky his mom was a marketing consultant.
Thank you Rand for sharing these lessons with us, and allowing me to share it with the wider world.
