But though we have some outlying attributes, Moz does have many of the other features stereotypical to tech startups:
* We've raised funding from traditional venture capital firms (as of 2017, $29.1 million across three rounds).
* Nearly all of our revenue comes from software.
* We operate with relatively high gross margins (75 percent and above).
* We employ very expensive, talented, highly-in-demand engineers, product designers, marketers, and customer service folks. The average Moz salary is more than $100,000/year, and with benefits and taxes, a new employee costs us about $145,000/year. More than 70 percent of our costs come from the salaries and expenses of people on the team.
* We've fluctuated over the years from burning cash in attempts to grow faster versus staying profitable in order to limit risk (e.g., from 2014 to 2016 we consumed almost $20 million; as of 2017 we were profitable again with more than $7 million in the bank).
Since our founding in 2004, we've had some wild ups and downs. We've survived boom and bust cycles, raising and spending venture capital, making successful acquisitions and not-so-successful ones, hiring sprees and layoffs, new product launches and product retirements, and big changes in strategy.
In 2014, after a particularly brutal period, I stepped aside as CEO and took a role as an individual contributor. As of this writing, I'm chairman of Moz's board of directors and an adviser to several of our product and marketing teams. I speak at more than thirty conferences a year and spend about 25 percent of my days on the road, helping folks around the world gain a better understanding of how search engines and web-marketing channels work. I still walk to the office from the apartment I share with my wife, Geraldine, run tests that Google wishes I wouldn't, try to be a force for
transparency both internally and externally at Moz, and do my best not to beat myself up for the mistakes of the past. (That last endeavor is the hardest.)
When I entered the startup world, I was predisposed to certain ideas about what it meant to be CEO of a company like ours—early stage, technology focused, rapid-growth seeking, and successful only if we earned big returns for our shareholders and investors. We all read the coverage of other startups and watch the TV shows and news that purport to have windows into this reality. But years into my own journey, I had a head-shaking, wait-a-minute-this-can't-be-right awakening. The media, the hype, the legends of how Silicon Valley startups work are just a carefully crafted model home. They're set pieces, painted by interested parties for their own benefits, built to hide embarrassing flaws. None of it is real.
You don't have to live, work, or start a company blinded, the way I was, to reality.
That's why this book exists, and that's why it's organized into tactical chapters, each unearthing the sometimes strange, hard-to-comprehend, or rarely-talked-about truths of the startup world. These chapters start with the common mythos epitomized by a famous quote from a notable name in the technology world. You'll see the words of famous investors, wildly successful entrepreneurs, and esteemed authors and, piece by piece, see their falsehoods and false impressions dismantled, first with stories of my own, and later through data, research, and analysis. Each chapter ends with ideas or tactics that have helped me (and sometimes others, too) overcome the problems within. I don't pretend to have all the answers. Not for a second. But I often have tactics that helped me out of a bind, and if they can help you, I'd kick myself for holding back.
So, get your controller. Insert your cartridge. It's ^^ vv <> <> B A and...let's get started.
THE TRUTH SHALL SET YOU FREE
(FROM A LOT OF $#*% STORMS)
You've got an interesting business, but we don't believe it will ever get past a few million dollars in revenue.
—Anonymous Investor I Pitched in 2009
In 2005, my coworker Matt and I were working in a run-down, shared office space above a noisy movie theater in Seattle when he
walked in. A hairy, barrel-chested, forty-something guy with gold chains, a mean grimace, and a stack of papers in a folder stared down at me.
He asked, "Are you Rand Fishkin?"
I was twenty-five years old, disoriented by his arrival, intimidated by his appearance and tone, and utterly panicked. I'm usually a terrible liar, so was taken aback by how quickly a response left my mouth:
"Sorry, I don't think he's here."
We exchanged a few more words, but I remember none of them. My heart was pounding. I hated lying, but I also had no idea what might happen if I identified myself. Matt just put on his headphones and pretended to be engrossed in whatever website he was working on. When the extra from The Sopranos
left, I called Gillian, president of our three-person firm (who also happens to be my mom
). I told her about the unexpected visitor. She guessed he was a debt
collector, sent by one of the firms to whom a bank had sold our debt.
Oh, right. The debt. The $500,000 we owed, in my name, to finance our struggling consulting business.
***** TABLE OF CONTENTS *****
INTRODUCTION: THE STARTUP CHEAT CODE
1: THE TRUTH SHALL SET YOU FREE (FROM A LOT OF $#*% STORMS)
2: WHY THE STARTUP WORLD HATES ON SERVICES (AND WHY YOU SHOULDN'T)
3: GREAT FOUNDERS DON'T DO WHAT THEY LOVE; THEY ENABLE A VISION
4: BEWARE THE PIVOT
5: STARTUPS CARRY THEIR FOUNDERS' BAGGAGE
6: DON'T RAISE MONEY FOR THE WRONG REASONS OR FROM THE WRONG PEOPLE
7: SO YOU'VE DECIDED TO ASK COMPLETE STRANGERS FOR MILLIONS OF DOLLARS
8: FOUNDING A TOP 5 PERCENT STARTUP MAY NOT MAKE YOU RICH
9: SCALABLE MARKETING FLYWHEELS > GROWTH HACKS
10: REAL VALUES DON'T HELP YOU MAKE MONEY (IN THE SHORT TERM)
11: LIVING THE LIVES OF YOUR CUSTOMERS AND THEIR INFLUENCERS IS A STARTUP CHEAT CODE
12: GREAT PRODUCTS ARE RARELY "MINIMALLY VIABLE"
13: SHOULD YOU SELL YOUR STARTUP EARLY? YES, PROBABLY
14: IF MANAGEMENT IS THE ONLY WAY UP, WE'RE ALL F'D
15: VULNERABILITY - WEAKNESS
16: SELF-AWARENESS IS A SUPERPOWER