How SEOmoz’s Founder Went From Deep Debt To $4+ Mil Per Year – with Rand Fishkin

Posted on Jun 30, 2010 - 8:49 AM PST

It got so bad that a collections company actually showed up in Rand Fishkin’s office trying to collect its part of the half-million dollar debt that he somehow accumulated. He couldn’t face the agent and pretended that he wasn’t Rand Fishkin.

In this interview, you’ll hear the inspiring story that shows how to get out of that kind of hole. Today, Rand’s company, SEOmoz, is one of the most respected names in search engine optimization. Its revenue comes from subscription-based access to online software and educational products.

(By the way, the transcribers did an especially good job today. So if you prefer reading, check out their work below.)

The FULL program


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About Rand Fishkin

Rand Fishkin is the CEO & Co-Founder of SEOmoz, a leader in the field of search engine optimization tools, resources & community. In 2009, he co-authored the Art of SEO from O’Reilly Media and was named among the 30 Best Young Tech Entrepreneurs Under 30 by BusinessWeek. Rand has been written about it in The Seattle Times, Newsweek and the NY Times among others and keynoted conferences on search around the world. He’s particularly passionate about the SEOmoz blog, read by tens of thousands of search professionals each day. In his minuscule spare time, Rand enjoys the company of his amazing wife, Geraldine. (photo via SEOMoz.)

*Raw* transcript


This is a raw, mechanical transcript. Readers (like you) are editing a better version here.

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And Grasshopper. I’ve had them now as my longest sponsor for a reason. Not only does my audience love them, but you might have heard several guests here on Mixergy say that they use grasshopper.com as a result of these messages and they love it. It’s the virtual phone system that entrepreneurs like me love, because it offers us multiple extensions, music on hold, call forwarding. It gives an impression of having a big, professional organization, but also caters to your need to travel and to be flexible. Check out grasshopper.com

Here’s the program.

Hey everyone. I’m Andrew Warner. I’m the founder of mixergy.com, home of the ambitious upstart. Today’s guest is Rand Fishkin. He’s the co-founder of SEOmoz. Business Week called him one of the top, young, tech entrepreneurs. He’s the search engine optimization expert who’s company has helped Zillow, Village Voice Media, and several divisions of Microsoft to all improve their marketing.

And, I have two goals for this interview. The first is, I want to find out how he built his business. I love entrepreneurship. I love hearing stories of how entrepreneurs built their businesses. And the second goal is to hear some search engine optimization tips for my audience so that they can build their business. I’m a little out of breath here, because just before we started, I ran out there to tell them to quiet down so that I could record this interview with Rand.

So, Rand, welcome to Mixergy.

Rand: Thank you very much, Andrew. Pleasure to be here.

Andrew: Thanks. First question is, what size revenues are you guys doing now at SEOmoz?

Rand: Sure. So, let’s see, last year was 4.1 million. But, last year we did do about 900,000 in consulting revenue. In January of this year, we dropped consulting entirely. We’ve been planning a partnership for a while, and our consulting business is off with a company based in London called Distilled, who actually has offices here in Seattle as well.

The revenue this year is expected to be between five and six million and that’s going to be all software. So, essentially, the subscription service online. And that’s folks who pay between about $100 and, you know, all the way up to, some enterprise folks are paying $2,000 a month to access our suite of tools and resources.

Andrew: Can you talk about what some of those tools are? What’s included in that package?

Rand: Sure. So, right now, it’s primarily targeted towards people who have SEO either in their job title or as a big part of their job responsibilities. Probably the biggest item that we’re most well known for is something called Linkscape. It’s a web index. It powers several different tools and a lot of different metrics.

So, it powers our toolbar, it powers open site explorer, which is part of the package. It powers the classic Linkscape tool. And a number of other tools that we keep in a place called Labs where we do, sort of, cool interesting developments without much UI. Though that web index is essentially designed to mimic the major search engines’ web indices. So, Google, Yahoo. Well, Yahoo’s about to have no web index, but, Bing, as well.

And, to give web masters information about who’s linking to them, how important are those links, what do those links say about them, where do they come from, sort of, the information that you wish you could get out of, say, a Yahoo site explorer or a Google web master tools, but with lots and lots of more detailed information and many times up, a much higher quantity of link information.

Andrew: And how many subscribers do you have?

Rand: We are just over 5,500 paying subscribers. So, yeah, a good number, but, I think, but probably very small in comparison to what we could achieve in the years to come.

Andrew: OK. And I think you said, how much money came from just the subscriptions last year?

Rand: About 3.2 million. We are expected to just about double this year.

Andrew: OK. Wow. All right. So, let’s go back and find out how you got here.

Rand: Sure.

Andrew: It looks like your co-founder is your mom. Right?

Rand: That’s right. I guess.

Andrew: Can you tell us, actually?

Rand: Yeah.

Andrew: Go ahead. Tell us about the partnership. And then, I’ll get into how you guys started.

Rand: Yeah. Well, so, I’ll go all the way back. In 1981, my parents moved out from New York to Seattle. My dad got a job with Boeing, and my mom started up a marketing company. Fast forward about 18 years later, and as her marketing clients started needing website optimization services and website building services, she brought me on. I had sort of been dabbling in web design in high school, and that kind of stuff.

I ended up dropping out of school in 2001. I was going to University of Washington’s business school and I dropped out two classes away from graduation to essentially work on this business with her. It was just the two of us for a while, at times, we would have had a third person. The business did not . . . you know, Andrew, I’d love to tell you, ‘Oh, yeah. Smashing success story. Grew and grew and grew.’ No. Not the case at all.

It was painful and hard, particularly from about 2001 when the dot com crash hit and no one wanted to pay for website services up until about 2006 when the SEOmoz brand, which was started in 2004 had taken off a little bit.

So, between those time periods, I personally racked up almost half a million dollars in credit card debt and loans. I mean, you remember what the economy was like, right? The credit card companies would just give you money, even if you had relatively poor credit and were paying your minimums. So, we kept just racking it up. Yeah. There was a lot of very, very tough times.

But, in 2006, 2007, the consulting business was really taking off with SEOmoz. At the end of 2007, we had launched the subscription business. The very start of the subscription business. And, Ignition Partners, which is a venture capital firm up here in Seattle. They’ve done quite a large number of investments. I think more than a billion dollars under management. So, a very large fund. They put one million dollars into SEOmoz, along with a private investor, Curious Office. And so, we used that to essentially build Linkscape, the web index I was talking about, and we’ve been growing ever since.

Andrew: OK. So, the business that you guys got into debt with, this was Outlines Northwest? Your mom’s company?

Rand: Yeah. I think it was called Outlines West at one point.

Andrew: I see. OK.

Rand: And then SEOmoz was the company that came out of that. So, SEOmoz started as just a blog where I would share a bunch of resources and basically blog about how bad I was at SEO and how I couldn’t figure all this stuff out. And then we started getting a lot of interest and consulting inquiries on that business, and that transformed into the business name.

Andrew: So, your mom launched her business when you were two?

Rand: That’s right.

Andrew: This was a big part of your life growing up.

Rand: Oh, yeah.

Andrew: What did she do? How big a part was it?

Rand: Well, it’s odd to think about. I think from a sense of, ‘Do I have a lot of learnings and takeaways?’ I wouldn’t say as much. Not from a business standpoint. But, from a personal entrepreneurship and showing the value of entrepreneurship, I think it’s a lot like any other profession, right? You grow up in your dad’s bakery, chances are you’re gonna be a baker, right? You grow up in a mechanic’s shop, then you are gonna know how to do those things.

So, yeah, I was familiar with design and marketing and copy. Just kind of through osmosis, not really through working on it. But, you know, I spent plenty of times in middle school where I just spent time at her office, waiting to get a ride home, that kind of thing.

Andrew: Would you guys talk business at dinner? I know we used to in my family.

Rand: Really?

Andrew: Yeah. My dad would tell me about a sale that he made or about how some guy didn’t pay his bill, or about how there was a new design coming out and he was gonna go copy it. That kind of thing.

Rand: Interesting. I have to say, no. I think all families are a little weird in some ways. And one of our family’s particular peculiarities is that my dad was never particularly interested in what was going on with the business. And for a long time dismissed it as sort of a hobby that he wished we would quit doing. So, we didn’t talk about it as a family very much.

Andrew: OK. And your mom’s name, her name is Jillian.

Rand: Jillian.

Andrew: Her last name is different from yours. Why?

Rand: She just never took my dad’s name.

Andrew: OK.

Rand: For business, yeah. In fact, my wife has done likewise. Fishkin is not the greatest of names.

Andrew: [laughs]

Rand: I mean, you’re a very lucky man. Warner, that’s pretty solid, you know? A lot of people would want to take that. But, Fishkin? No dice.

Andrew: I got to tell you. My wife doesn’t want to take my last name, Warner . . .

Rand: Oh.

Andrew: . . . because it’s a made up last name. I made it up. She does want the name I was born with.

Rand: What’s that?

Andrew: So, we’re both gonna go back to that. Caleely [SP]. It was Caleely, and we’re both gonna go back to Caleely.

Rand: I like that, actually. I think I might take that, if you don’t mind.

Andrew: Or your wife and mom.

Rand: Yeah. There you go. There you go.

Andrew: You’ve got Fishkin branded out there.

Rand: Right.

Andrew: OK. So, you start working for your mom as far as I can see. By the way, what’s it like to be working for your mom? To have me say, ‘working for your mom.’ Even though you’ve earned it. Even though you’re the guy behind the business, it still feels like you’re taking over your parents’
Bakery. As you said it earlier.

Rand: Yeah. Yeah. I think to a certain extent, that is right. I mean, when we took venture funding, the terms kind of changed. I had been the CEO of SEOmoz since founding. But, for the last few years, Jillian has been involved in SEOmoz as sort of an evangelist. She still holds the title of President. But, she’s not involved in day to day activities anymore. She does sit on the board of directors as a large shareholder, of course.

Yeah, I would say the experience was, for many years, very good, for a few years in there, pretty tough. And then now it’s great. It’s pretty smooth again.

Andrew: What do you mean by tough? What was that like?

Rand: Yeah. You’ve got to watch out Andrew, you’re treading on sensitive territory. [laughs]

Andrew: Let me tell you something. I get e-mails all the time from guests afterwards, who say . . .

Rand: Yeah.

Andrew: ‘Oh, I didn’t do a good job. Can we do the interview again?’ And, inevitably, it’s because they just didn’t feel comfortable being open.

Rand: Yeah.

Andrew: Let it go. And, if you feel at the end of it that you’re not happy with anything you’ve said, say, ‘Andrew, let’s dump it.’ We could always do it again. But don’t regret not saying anything. You don’t want to do it that way.

Rand: I appreciate that. I appreciate it. I mean, I and SEOmoz obviously have big core values. And one of those is transparency. So, I like to be transparent about this stuff. But, you know, when you get into family stuff and its relationships, and, of course, I strongly suspect my mom might watch this interview . . .

Andrew: [laughs]

Rand: . . . so, I want to be respectful of that, of course, as well. So, I would say that a kitchen can only have one head chef, right? And, I think that’s a part of it, as well as, Jillian’s a terrific small business entrepreneur and she has done some very remarkable things in building up the company. But, I would say that at the scale that SEOmoz was reaching towards and the formalities of many things were in some ways tough for her or maybe just frustrating.

So, she had been used to this very bootstrapping, scrappy experience and having things, like, ‘Oh, there’s auditors coming in,’ and in fact, some auditors just walked by. We’re getting audited right now by Deloitte & Touche. But, having that level of formality, that level of commitment to the fiduciary responsibilities of a board of directors and formal investors. Those things were particularly challenging.

And, I think that, you know, we had done a lot of things to try to get through those tough times when we had lots of debt, those kinds of things. Things like, you know, credit card company calls you up, says, ‘You owe us 30 grand,’ and you say, ‘Well, I’ve got five. I’ll give you five.’ And a lot of times you could convince them to take five. Because they knew they sold it to a debt recovery agency or something, they’d only get two. So, that kind of thing.

But, it was not an entirely easy transition. I’m glad to be through with that phase.

Andrew: The phase where you guys were in debt, you mean?

Rand: Well, certainly the phase where we were in debt was very tough. But, then, even the phase of that first year to 18 months after taking investment capital. Was just a really tough time.

Andrew: I see.

Rand: In particular, Jillian and I don’t massively disagree on much of anything. But, I think stylistically we can be quite different in our approach to problem solving.

Andrew: Can you give me an example? And we all go through this. Anyone who’s got any kind of partnership has got stories like this, and we can all identify. I can tell you a ton about me and my brother.

Rand: Sure. Yeah. It’s funny, actually, I don’t know if you have interviewed or talked to Dharmesh Shah from HubSpot, but he also started a company with his brother, and has a lot of these same experiences. So, I think it is very familiar for many entrepreneurs.

So, I would say, what would be a good example of that? Boy, this is going to be really weird to talk about. So, things were getting a little tough and tight around the end of, what was that? Sort of around the beginning of 2008 financial collapse. And remember, we had taken money from Ignition Partners in November of 2007. So, fast forward to October of 2008 and the board of directors meets and there’s sort of this panicked atmosphere.

I have a bone to pick with Sequoia over their memo that was sent out. Right? The Sequoia memo, that sort of wrecked things for the venture industry for about eight, nine months. Made a lot of entrepreneurs really nervous, that kind of thing.

But, that memo had come out. And we’re discussing things at the board of directors, and I volunteered to have my salary cut by quite a bit, actually. Jillian was very against this idea. We were actually just about to become profitable again, and we have been profitable since December of 2008. But, yeah, it was one of the only times when we did a board of directors vote where not everyone was agreed. So, you know.

Andrew: She didn’t want you to take a salary cut. Why?

Rand: A number of reasons, but I think that one of the big ones was that she was concerned about the perception of undervaluing myself and of taking the responsibility, that it was a non-scalable way to solve financial situations.

Andrew: OK.

Rand: Yeah.

Andrew: OK. All right. Fair enough.

Rand: [laughs] This is not stuff I’ve talked about with other people, so, yeah.

Andrew: I don’t think that you’ve said anything. I don’t think you’ve gone beyond the line. I don’t think you’ve crossed the line is what I’m trying to say.

Rand: Well, I’m sure you’ll push me to at some point.

Andrew: I might. And, you know what? I want to give you a safe place to do it. And, so I’ll say this. At the end of the interview, if you feel that you’re uncomfortable with anything you said, we delete it, and we could start over or we could do something else.

Rand: No.

Andrew: Just let me know at the end . . .

Rand: Andrew, I think it’s really good. It is extremely rare for me to have the boundary of comfort with transparency pushed. And, so, this is a great experience. Let’s keep going.

Andrew: OK.

Rand: I like it.

Andrew: I will push you just a little bit further, because I’m dying to find out how you end up half a million dollars in debt.

Rand: Sure.

Andrew: When you’re running a consulting business.

Rand: Yeah. Well, it involves poor hiring of contractors, not being able to make money for many years. Essentially paying, doing the opposite of the lean start-up and bootstrapping. Thinking, you know what, we’re really gonna need a great looking office and a great website and we’re gonna need contractor help on this project and that project.

I think a lot of it, too, is once you dig yourself $50,000 in, $75,000 in doesn’t seem all that much different. Once you’re at $200,000, another $50,000 grand just doesn’t seem that bad, and they are offering it to you, right?

I would say a lot of poor decision making, which you can see reflected overall in the broader credit market in the U.S., right? This is not an uncommon experience. And I don’t want to suggest that because now I have a great business and SEOmoz has become a success and that kind of thing, that I wasn’t 21 years old making really, really bad decisions. 21-year-olds shouldn’t be left to make decisions in those kinds of businesses.

And this would be another thing that I’d say about working with family. In some cases, family members can be harsher on you than anyone else. My mom and I really not like that at all. In fact, I would say she was far too lenient with the decisions that were made around the company in those early days of SEOmoz.

Andrew: Can you put a little more flesh on that? What kind of contractor help did you get? What did they do? What did you hire them to do and who did you hire?

Rand: Sure. Primarily designers and developers. I would do some design and those kinds of things. Actually, you know what’s hilarious is from 2002 to 2004, we hired quite a few SEOs to try and help us out. And, virtually no success anywhere. I think we hired a lot of the wrong people. We didn’t know . . .

Andrew: To help you build what? What were you building back then?

Rand: We had done a weird thing, probably not that weird. When we found in 2001 that we couldn’t get people to pay decent money for websites, we offered to build them on commission on contract. And take 1 percentage of the increase in sales that we could generate. Figuring that we could do a better job in building sites.

So, this, of course, meant that we were spending more and more money on the project, on the web site, hoping that we could get a return. It turns out that we did that four or five different times. Invested quite a lot in each project and only two of them made any money. Actually, it was almost like a venture model, only one of them made enough money to help us eventually repay almost all of that debt and dig ourselves out.

Andrew: One deal helped you repay about a half a million dollars in debt?

Rand: Let’s be completely fair. There were a lot of situations where we called up the credit card companies who we owed $20,000, or $30,000, or $50,000 to, and paid them $0.10, $0.20 cents on the dollar. So, we didn’t pay off half a million dollars. My credit is still so bad that to get an apartment, my wife needs to sign for everything. I mean, if I had declared bankruptcy at the time, my credit would be cleaner than it is now.

Andrew: Wow.

Rand: Oops. [laughs]

Andrew: You know what? I’ve got to put an open call out there for any lawyer who knows how to negotiate debt away. I’d love to have you on here and talk about it. Because, there are ways to do it properly. There are ways to do it poorly. And, I think that most people don’t even understand that they can negotiate stuff away.

Rand: Yeah.

Andrew: And there are ways to do it without having it take a significant hit on your credit report.

Rand: Oh, really? I wish I knew about that.

Andrew: [laughs] Well, at some point, there is no way to have it stay away from your credit report. Moses is asking an interesting question here. He is saying, ‘Why didn’t you declare bankruptcy back then and just find a job?’

Rand: You know, it’s really part of that getting yourself so deep in the hole that you don’t even consider climbing back out. You just keep digging. And I think that was the mentality I had.

I mean, I remember one day, the only real day where I thought about it for a serious amount of time was, there was a collection agency that one of the cards had sent the debt to. And, the agent, the guy came by the office asking for me. I pretended that I wasn’t Rand Fishkin right when he came by.

It’s a terrible feeling. It’s just awful. Absolutely awful. We had left this really nice office over in a big tower that we had to basically move out, and get out of our lease that we had signed. We had to move on the weekend so the security guard wouldn’t stop us from taking our equipment, because they will often times do that if you default on a lease.

We moved into this crummy little, smaller than the office, maybe about the size of the office that I’m in right now, above a theater, where you could hear Star Wars playing in the theater downstairs every two hours. Smelled like popcorn. There was a Planned Parenthood office right next to us, so we’d get bomb scares in the building all the time. And we had to run out for those.

This collector, this credit agent guy came by, and then when I got home, I was living with my girlfriend in an apartment in her name. I mean, I didn’t have a salary, I couldn’t afford anything. My girlfriend, now my wife, was paying my rent. And, he was waiting for me there. And he’s just, like, ‘You. Gotcha.’

Andrew: Oh.

Rand: It’s just one of those. Serve you with the summons and the papers. I remember thinking, ‘Maybe I should just do this bankruptcy thing.’ But, I don’t know what it was. It was a combination of blind faith and what I would call stupidity, actually. In thinking about the problem logically, even now, I think to myself, ‘That would have probably been a good move. Go. Declare bankruptcy, get a real job.’

I probably could have gone back to school, finished those two classes up. But, weirdly, thank God I didn’t. Look at SEOmoz. There’s 24 amazing people in this office working their hearts out, making good money. They all own stock in a company that’s in an exciting place. That’s been growing two, three times for the past four years. That’s got a business model with amazing margins.

We get to help hundreds, thousands of web masters everyday. I wouldn’t give it up for the world. But, man, when you’re that far in, the view is not pretty. It really isn’t.

Andrew: And, I’ll add to all the things that you’ve said that you guys have accomplished: a stellar reputation in this business.

Rand: Oh. Thank you.

Andrew: One of the top reputations, SEOmoz has. Another question from the audience. Andrew SG asked about the name. And, I know that in 2006 you’d wrote a blog post explaining it, but for people who didn’t read it . . .

Rand: Sure.

Andrew: What does SEOmoz mean?

Rand: So, it’s the most obvious thing in the world. When I started the blog, it’s on a .org, because I started it as kind of a not-for-profit anything. It was just a website where I was gonna post links and information and I actually had some free tools. Didn’t have a real business behind it. We didn’t even start consulting under the SEOmoz name until 2005.

But, when we started up, we were looking for a name that was short. That had the word SEO in there so that people would know what the blog was about. And, I was a big fan of the Mozilla Foundation, with DMoz and ChefMoz. What was the other ones that they were doing at the time? There was, like, MapMoz, there was a bunch of them at the time that were coming out. That were based around this open source, weird transparent.

And my philosophy around SEO, maybe it’s not even a philosophy, but a frustration, was that so many people who knew so much about it would share with me and be open about their experiences when the industry had this terrible reputation of being, ‘Oh, it’s a bunch of sourcers, behind the scenes and they won’t tell you anything.’ And, I thought, ‘You know what? This community is gonna try to expose how open and sharing and remarkable the SEO world really is.’

And I think for folks who taught Oilman, sweet guy, tremendously talented, has had a lot of success. Sometimes he’ll put on a rough exterior, but, oh, man. He is a really, really kind, generous person. And there’s so many people like that in this field. So, that was SEOmoz, was taking SEO and combining it with the moz ethos. There you go.

Andrew: I see. And you said, I think in that 2006 blog post, that you were hoping to get more voices in here and to show other people’s ideas. And, you are doing more of that today with the forums and you also have a place where your users can write their own blog posts and vote up the best ones.

Rand: Mm-hmm.

Andrew: I see more and more of that happening. By the way, the criticism of the space is still there. I read Jeremy Schoemaker’s blog post recently. He doesn’t go to conferences anymore because it’s all the scummy people who go to conferences, he says.

Rand: Well, it’s odd, because I’ve seen him at quite a number. [laughs] So, I think when you talk to Jeremy in person, he’s a very different individual in the flesh than the one he portrays on the web. And, I think he’s quite open about admitting that. He writes his blog from a very provocative standpoint and one that isn’t necessarily true to himself. So, he’ll criticize the SEO world or he’ll criticize other things that actually he participates in and enjoys and uses and doesn’t have anything against. But, he loves to stir the pot, and it’s a very successful blogging strategy for him.

Andrew: It seems though, that still, the best ideas, the best tips don’t come so much from blogs like his and even like yours, or from the forums on those sites, but from having one on one conversations where you reveal a little bit, and he reveals a little bit and you both get to learn a little bit more than you would publicly. Do you still think that’s true?

Rand: Yeah. In many cases, I think I would agree. There’s a degree of caution that you need to use whenever writing in public or whenever presenting in public that makes it very challenging. As a good example, we do a weekly video series on SEOmoz called White Board Friday. And I last week talked about an experiment with paid links. You know, if you and I got together in person. I’d love to come down to Argentina sometime. I could show you where the links were purchased from and what they were pointing to, and you could probably get a much better sense.

But, when I talk about it on the web, I think a large part of the SEO community has made it clear that they don’t like exposing where paid links come from, what sites they’re pointed to and those kinds of things. And so those details are removed when I discuss it in the video. And I need to talk about it more in the abstract.

Those kinds of things do happen. I think getting together in person is a great way to share. But, that being said, the web as a whole, and communities. well, like SEOmoz, but like Hacker News, Y Combinator, and even Mixergy are pushing the boundaries on that transparency and giving so much more insight.

I mean, you’ll see bloggers writing about the AB test they conducted and which button worked for them in as much detail as you could possibly get from talking to them in person. I think that’s really quite remarkable. I hope the web keeps going in this direction. I’m excited by it.

Andrew: So you started out blogging in 2004. You were blogging for what? Why were you writing so much?

Rand: You know, I kind of have a tough time putting my finger on it. I would say that two big things were driving me. One: I wanted to be taken seriously by the SEO community and to get more insight and ability to connect with other folks in the space so that I could do a better job. Because, frankly, we had hired these contractors, we had been working with other folks who had no success, we took it on ourselves. And, I was struggling dramatically. I was really, really having a hard time having success, particularly in Google. Yahoo and MSN, which was the Microsoft search engine at the time, I was doing fine in. But, Google, I just couldn’t crack the code.

So, having that experience of talking to other folks was something I really craved. And SEOmoz was a way to reach out to that. The other reason, I think, as well, was just this strong desire to show all the things that I was doing. I had always wanted to share. And even when I started in the SEO world, I started just sharing on forums. I’d essentially leave comments on forums, start up threads. I was a heavy, heavy contributor to probably four or five different forums about SEO for a long time, from about 2002 to 2004 or 2005, and then just wanted to put this stuff out on our own site.

Andrew: You said that you didn’t know that much.

Rand: Yeah.

Andrew: But, you still felt comfortable blogging.

Rand: [laughs]

Andrew: What were you blogging? And why did you feel comfortable doing that?

Rand: Yeah, so, if you go back and read a lot of those posts, it’ll be, like, ‘Oh, my gosh. I just found this cool new blog from this guy named Rusty Brick.’ His name’s Barry Schwartz, but of course I hadn’t connected the two, right? And I’ll say, like, ‘Wow. He talks about linking in this whole different way. It’s super exciting. You should go read it.’

So, the blog was very early stages. I think it’s probably a year to 18 months before you see any real good advice coming into that blog. The early days were just filled with me sort of discovering what other people were talking about and bringing those topics up. Or talking about some specific issue I’d seen or was fighting against. That kind of thing.

Andrew: All right, I’ve seen that a lot, actually. That, it’s almost like taking notes on the world the way you would if you were a student in a classroom. But, posting your notes publicly, so the people who hadn’t even learned as much as you had can read from you. And, that the people that you’re learning from can see that you’re paying attention and you’re part of the community. Would you say that’s fair?

Rand: Yes. Yeah. And that second part is actually so critical. I think that in the SEO and technology spaces, a lot of people have been talking about blogs and bloggers getting less generous with the links that they share, with the information. Not the links they share, with the links they post on their sites. Essentially, they won’t say, ‘Wow. This was a really great interview by Andrew on Mixergy last month and you should check it out and watch it.’

And I think that that has so much power. It has so much power to connect you to the community, to connect you to other entrepreneurs and bloggers. Just to write about what other people are doing. So, I would certainly recommend that maybe we should start thinking about trying to do more of that.

Andrew: You know what? I know that I get a lot when I do that. When I read someone’s blog post and I even write four or five sentences summing it up and post it publicly. Publicly makes me think it through a little more and it helps me connect with the person. And then the benefit is that if somebody were to do a blog post on us doing this interview and link over and use your name, I would see that the person wrote it and I would want to connect and find out, who is this person? You would have a Google alert go off on your name.

Rand: Right. Right. Exactly.

Andrew: I see, yeah. All right, and I’m not suggesting, I’m not grubbing for people. Do whatever you feel like. All right. So, you started blogging. When did you start to see results from this? What were the first results you saw?

Rand: So, the first one was in, gosh, it must have been February of 2005. Danny Sullivan, who had almost started the search marketing community back in the late ’90′s. At least had started it as a more serious endeavor rather than just an online thing. Started up the Search Engine Watch websites.

Started up the search engine strategies in person conferences, I think in San Francisco, ’97 or ’98 was the first one. And he invited me to come out to New York. I had mentioned in the Search Engine Watch forums that I couldn’t afford a ticket, but I wondered if I should fly out to New York and just come to the bar and go to the networking event, get an Expo pass.

And, Danny e-mailed me, and said, ‘Hey, Rand. I have been watching your blog, seeing what you’ve been doing, connecting with the community. Here’s a free pass to the event.’ And, ever since then I have been a huge evangelist, a massive evangelist for everything that Danny, at first, Search Engine Watch and Search Engine Strategies, but when they were bought. And, he started a new company, Third Door Media. Everything that they’ve done.

So, I am forever in his debt. And hopefully trying to repay that. But, that was a very remarkable instance for me. I got to go to this conference. I connected with dozens of people that I’d only met online who I thought the world of. I remember being just more excited than when you meet your favorite celebrity. To meet some guy who did research on a website that I read about. It’s just that kind of a feeling. So, it was great. And I think it really helped launch me into the broader SEO community.

The next Search Engine Strategies conference, I pitched to speak at. And, that was Toronto. I barely scraped together the money to even go. And, spoke at the show. Got great reviews and have been invited back to speak at tons of events ever since.

Andrew: When did you start getting business?

Rand: From SEOmoz, it really started kind of heavier, maybe the end of 2005. And then, NewsWeek magazine, the writer for it, Brad Stone, is now the New York Times Technology columnist covering Silicon Valley.

And, Brad had started chatting late at night on the web with a spammer who I believe went by the name Earl Gray. Out in the UK. And he was talking with him and thought, ‘Oh. This SEO stuff sounds kind of interesting,’ and said, ‘Hey. Can you refer me to someone who does this more White Hat SEO?’

And Earl recommended us. And, Brad flew out to Seattle. Did an interview. Came by our crummy offices next to the Planned Parenthood and above the theater. And talked to the crew. And wrote a big article about us that, actually, we have framed, sitting in the office somewhere.

And that came out in January 2005 and was just, kind of, an explosion after that. There were more and more press stuff. There was more calls. There was more interest. And even more so than that, one of the biggest things that I did, is I remember thinking, ‘This big piece is gonna come out. And, all these people are going to be wondering what’s SEO and how do I do it.’

And so I wrote something called, ‘The Beginner’s Guide to SEO.’ I posted that on SEOmoz and actually that was almost bigger, perhaps even bigger than the NewsWeek article itself in terms of just driving tons of traffic to SEOmoz. And then, tons of people who said, ‘I read your Beginner’s Guide, and now I’d love some SEO help.’ I didn’t even think of it as a business tactic. I was more thinking, ‘Oh, man. All these people are going to be calling SEOmoz or e-mailing me from the article and wanting to learn SEO. I better put up this guide to save myself a bunch of time.’ And then that turned into business.

Andrew: And before that News Week article, what kind of business were you doing? Were you doing consulting already in SEO?

Rand: Yeah, so the consulting was those websites that I mentioned that we had sort of been building and were running for other folks. And then were trying to make some money off the delta. That was essentially . . .

Andrew: Gotcha.

Rand: . . . our primary business at the time.

Andrew: By the way, it looks like that link is broken on your website. Can someone in the chat room either put it up now or maybe somebody afterwards send a link to that NewsWeek article if you can find it?

Rand: Oh, yeah. That is a hard one to find, ‘cuz they . . .

Andrew: Let’s see if somebody can find it. We’ll challenge them. I would love it if you guys did it.

Rand: I think . . .

Andrew: How about this? Oh. No. Position tech. How about this? I will link back to you guys. Can I give anchor text? Is that permissible? For me to say as a reward for finding this and helping Rand, I will use whatever anchor text you guys want, as long as it doesn’t include . . .

Rand: Seems totally reasonable to me.

Andrew: Done. All right, good. So, please, if you can help save Rand some time here. I noticed, too, that you sell guides, or you offer guides as part of the subscription and you sell them individually, too.

Rand: Sure.

Andrew: When did you get into that business?

Rand: When we first started the membership service in 2007, the guides were something we just figured, ‘Hey. You know what? As part of the subscription, let’s make.’ I think we made four guides and we launched them with the membership.

And then, someone said, ‘Oh, well you should offer to sell them individually, because it will help people understand the value of signing up for the subscription.’ ‘Cuz they get these guides for free with membership. And we put out new ones every three to six months.

So, yeah, it wasn’t a huge thing. I don’t know that I would recommend it highly for other subscription services. I will say other things that move the needle more were, we started doing two webinars every month. That was actually pretty big. A lot of people have been saying that, not necessarily they joined for the webinars, but the webinars are one of the big reasons that they stay. Because they just love to see those every month.

Andrew: OK. So, first you had the membership. Then you had the webinars and the guides that you’re selling.

Rand: Well, we’ve had the membership since 2007. And we kept adding to it over time. So, it started out, it was just guides and some access to tools, I think it was $$29 a month. It was just very cheap. We added in something called Q & A, where you could ask us questions and the SEOmoz staff, basically, myself and the SEO team here would reply to all those questions. And we still do that today.

We didn’t add webinars until last year. We grew a bunch of the tools, Linkscape I mentioned we launched at the end of 2008. We put in some directories, like a social media directory for people who are seeking, ‘Where can I go and participate in social media?’ And that was sort of a big question in the SEO field for a while. So, there’s all sorts of stuff in there.

Andrew: OK. What was in the membership at first?

Rand: I think it was just the guides and access to the tools. Oh, and we might have had a section called Pro Tips. So, we’d essentially write very short blog posts on specific items and throw those up. There’s a few hundred of them in there now.

Andrew: OK. So, Pro Tips, which were essentially guides, the full guides that we talked about, and what was the other one that you said?

Rand: And some tools.

Andrew: And some tools.

Rand: Basically tools that we had been using for our consulting stuff that we made . . .

Andrew: OK.

Rand: . . . available to the public. But, it was very hodge-podgey. Even today, I would say that the SEOmoz service is not nearly reaching the potential that it should be. And we’re working very hard to change that. To get up to be commensurate with what you expect from professional level web apps.

Today, if you want to run Survey Monkey, you don’t go from one different tool to create the survey, another different tool to send out the survey, a third tool for analyzing results that come from guys named Bob. Right? But SEOmoz is very much like this. Where, it’s this hodge-podgey collection. And, so, all of those are getting more into campaign based format this summer.

Andrew: I see. And when you raised money in ’07, it was with this idea that you would shift towards an online software company?

Rand: Yeah. Both that idea, and one of the other big pieces was, we’re gonna build our own web index and link graph, and calculate our own versions of non-patent infringing versions of page rank and trust rank and hubs and authorities and all this other type of stuff.

We’ve been obsessed with the problem of making SEO itself, the process of understanding why something ranks where it does, and what you can do to potentially rank higher, more transparent. That’s just been a big core value here is trying to, I wouldn’t say expose that, but bring it to light. Shed some real light on it.

So, now we do incredibly complex, sophisticated stuff on that front. Machine learning against rankings to build models that we can then reverse out. Not just correlation, but causation and causality information. And, it’s fun. It’s exciting. I’m working with people who are a hell of a lot smarter than I am. And, that’s pretty cool.

Andrew: Are you a developer yourself?

Rand: God. I’ve written less than 1000 lines of PHP probably ever. So, no.

Andrew: So, how do you manage developers, when you’re not one yourself and your co-founder isn’t one?

Rand: You hire a VP of engineering with tons of experience and deep technology understanding. We hired a woman named Kate Matsudaira who worked on Jeff Bezos’ team at Amazon, was the VP of engineering for Delve Networks, which powers video for services like the NFL. Yeah, and she’s been really remarkable, just recruiting a great team, growing that team, mentoring. It’s been awesome.

Andrew: So, how’d you do that? You said earlier that you had trouble hiring the right people and that’s why your expenses got out of control. I saw Lenny in the audience asked if you have any advice for avoiding those problems. It seems like you found a way to get through them. How did you do it?

Rand: Yeah, I think today the big difference compared to, this would have been seven or eight years ago when we were really paying through the nose for all sorts of things and spending way too much on all sorts of expenses, is that there’s so much around. Easy bootstrapping, using the web.

Everything from your 99 Designs to guru.com to Freelancer, to Craigslist. The ability to hire people without having coffee with, like, five different guys and then bringing one of them on and giving him $$25000 to build this one website. It’s just not like that anymore. So, the expenses of bootstrapping are down so dramatically. It’s just like the expenses of designing on the web are down dramatically.

Andrew: All right. So, that covers the expenses part. But, what about the trust? You have to trust someone a lot more today than you would have back then. Because, you’re essentially passing your work on to them. And, they’re not in your office. They’re not full time employees, especially if they are coming from sites like 99 Designs.

Rand: Yeah. This is essentially the difference between building it on an early stage bootstrap level where you might not have that trust. You might have to hire people a few times or get some different bids and that kind of thing and scrap something together. Versus, OK, we’re doing professional level, professional quality development. We’ve got 5,500 people every month who are paying us. You know, we have about 20 more every day who sign up for the service. We’ve got investors.

And, for that, we have been extremely picky. Our dev staff is right outside my door. All eight people on the engineering team, the four folks on the product team, the three folks on the marketing team, you know, operations team. Everyone is here, in house, in Seattle. We get together at the office everyday. I think that really does help to establish the trust levels.

Hiring great people is, as you scale up, it becomes more and more and more important. And, you have those legacy people that you signed on when you really couldn’t afford bigger and better. And a lot of times, those folks either need to grow and mature and become amazing in their own right, or you need to go your separate ways. That’s tough.

Andrew: By the way, do you guys use 99 Designs for any of your design work?

Rand: I don’t.

Andrew: No?

Rand: I haven’t used them yet.

Andrew: I’m glad you brought them up, though.

Rand: I was merely using them as an example of how one can scale, or can do bootstrapping at a much cheaper price. There weren’t those platforms back in 2002.

Andrew: Right. Are you using any sites like that? Lenny Ramirez is asking. No, you’ve got your own team right now. At this point, it seems like you don’t need to.

Rand: Yup. I don’t think we have used any of those services. Oh, that’s not entirely true. For some SEO testing projects, we have employed some things here and there with Mechanical Turk or Guru or Freelancer. Yeah.

Andrew: All right, cool. By the way, if you guys have any questions now, just type ‘em in. I can’t take them from the other sites that you’re on. But, if you’re on Mixergy.com watching live and you have any questions for Rand, soon to be Rand Warner apparently when I give up that last name, just type it in.

Rand: [laughs]

Andrew: And, if Oilman has answered any questions, it would be very rude to have me ask Rand for a correction to it. Oilman knows what he is talking about. If he is in the chat room, you can trust him. I’m wondering ever since you told me why you gave me the numbers so quickly. Why did you tell me what your revenues were?

Rand: They are posted on our blog. It’s not a big . . .

Andrew: Why? I saw that too, and in Business Week and I think a couple of other places.

Rand: Sure.

Andrew: And, I figured, let me get the latest. Why do you post it?

Rand: It’s one of the questions that people are most curious about. And I can see no competitive disadvantage or disservice by revealing it. I think that there’s a lot of paranoia about revealing your numbers.

There are probably cases where it makes sense, where it’s understandable. But, I think for us, we’ve always been transparent. We made that commitment back in 2005 that we were gonna post our revenue numbers each year. And, we’ve done so. I see no reason to break that promise just because we have a more formal business or a bigger one. Or investors. Or those kinds of things.

Andrew: Any benefit from doing it?

Rand: You know, you were talking about reputation and those kinds of things. I think it does help for people to see that we’re a serious business. And millions of dollars in revenue certainly helps with that. The other advantage that I would say, generally speaking, is that people who maybe previously wouldn’t have considered applying for a job at SEOmoz or being interested in the company in those kinds of formal partnership ways might be more interested.

But, to be honest, I wouldn’t say that we’ve seen direct business benefit. You know, I love that quote. Our core values may be a competitive advantage for us. But, that’s not why we have them. We have them because we would maintain those values, we would want to respect those things and stick to them even if they were competitive disadvantages.

And that’s exactly how we feel about all of our core values here. Which, we lovingly call TAGFEE, which is an acronym for the six core values that we have.

Andrew: Do you want to say them? What are they?

Rand: Sure. So, it’s transparency, authenticity, generosity, fun, got to have some fun. I don’t know if you can see the Transformers on the wall behind me.

Andrew: I was wondering what was in those cases behind you. I said, ‘Do I ask him about that or is it too much of a distraction?’ He’s got, for anyone who’s listening to the MP3, and I know most people take these interviews in that way, there are toy boxes behind him. I thought it was maybe GI Joe figures or something like that. So that’s what it is. Transformers.

Rand: I’m a big Transformers guy. In fact, I have the Japanese ones, which hilariously, instead of saying, ‘More than meets the eye,’ they say, ‘The truth who has met the eye before.’

Andrew: [laughs]

Rand: That’s apparently how that translates. So, fun.

Andrew: Fun.

Rand: Empathy, which is being able to put ourselves into the shoes of our members, our partners, our visitors, guests to our office, people that we work with in any way. Our employees and our bosses as well. And then exceptional. So, we like to do absolutely exceptional work.

We try and ask ourselves when we release tools, products, blog posts; is this among the best that’s out there on the web of this variety of whatever it is that we’re doing. I’m sort of on the opposite side of the current trend of launch early, launch often. In some ways, not always, but in some ways. And so I really like to have great products, great blog posts, great guides, great material, ready before we actually launch it.

Andrew: Have you had any issues with that? Where you launch something perfect and you realize, ‘Well, it’s really not what they were looking for.’ It took us so long, we got disconnected.

Rand: Plenty of times.

Andrew: Can you give me an example of that?

Rand: So, we recently launched the Beginner’s Guide to SEO. The new, updated version. I think it was 18 months overdue. And I think that was frustrating for a lot of people who came to the old resource for a long time and maybe even lost some faith and credibility in SEOmoz because they thought, ‘Man. What is this guide from 2006 doing out here? This doesn’t have the most current up to date information.’ Frustrating.

I think that obsession with trying to be exceptional has in some ways hindered, and I hope we can find a better balance in the future.

Andrew: I see. OK. The upside of it is that when you do put something out, people can trust that it’s your best work and that there’s a lot of care in it and that you’re not just experimenting on them.

Rand: Yeah. In particular we’ve seen that when we run SEO research and experiments. So, we actually got some criticism. We had released one early this year in January where our sample size of experiments wasn’t big enough to show a statistical significance in the test that one of our guys had run here.

And he posted about it, and we supported him, certainly. But, we had to issue a retraction about a week later and put out some new information about what we were gonna try to do to resolve the problem. And, since then, we’ve been doing lots more research work and putting a tremendous amount of effort into making sure that it is not just credible but backed up by a lot of good thinking. Very, very rigorous processes, those kinds of things.

Andrew: OK. I saw that too. There was an interesting back and forth on that and it’s interesting to see, too, that you’ve addressed it. And I know some people are listening to this and saying, ‘Andrew, why aren’t you digging in deeper into that one issue?’ Well, I think it’s current events. And, I’m not really into current events. I’m much more into hearing the bigger story behind the company.

Rand: I mean, I’m happy to talk about the correlation stuff. But, I think that the blog post that Ben Hendrickson put up on the site a few days ago, on Friday, was extremely strong in refuting all of the potential criticism. So, I’d urge you to read that, and read the comments and check those things out. I think that certainly reasonable people can disagree about all sorts of things. But, on the process and methodology, we feel pretty darn good.

Andrew: Earlier, when we talked about your numbers, Oilman said, and, by the way, I keep bringing up Oilman because he’s a past guest here on Mixergy, so I trust him.

Rand: Yeah, I know. He was in fact how I got on Mixergy and started chatting. I think I had watched your interviews . . .

Andrew: Is that the interview where I met you first, in the audience?

Rand: Yeah. But, I jumped into the audience on that one. And, it was really fun. It was great to watch.

Andrew: Oh, cool. So, he’s saying, ‘Rand has some secrets behind the numbers that he’s sharing.’ What kind of secrets, Oilman? What’s behind the numbers, Rand?

Rand: Well, let’s see. So, our margins are quite high. But, our expenses are also high. So, we, like a classic venture-backed company, are constantly trying to reinvest and grow. We do have quite a bit of money in the bank right now. We have not been able to spend as much as we’d like.

We’re very picky about team members, as I mentioned. And one of the problems with that is that it means that it’s tough to recruit. We have lots and lots of interviews and we hire very, very few people. We just brought on an engineer that we all love, Bryce, and he’s phenomenal. But, we’ve interviewed dozens of folks.

We’ve been interviewing for a VP marketing position that we hoped to have at the beginning of this year since November of last year. And even today we’re still interviewing and talking to folks about that. It’s been a tough road.

And then, we predicted our growth reasonably well, but we did not predict retention as well as we thought. So, we’ve actually been retaining paying Pro members longer than we thought we would. I guess, that’s great, right? You should be super excited about that. But, certainly, when the board of directors looks and goes, ‘What’s this 1.2 million in cash doing in your bank account? Get to work. Spend this money. Grow.’

And so, those are things that we are certainly thinking about very hard.

Andrew: What are your net margins?

Rand: Let’s see. I think it last year was 87 percent. The margins on a software product are really quite excellent. And this is one of the big reasons why . . .

Andrew: Is that gross or net? Does that mean that .86 cents out of every dollar ends up getting taxed?

Rand: Right, right. No, no. I’m sorry, that’s wrong . . . 86 cents is the . . .

Andrew: Gross margin.

Rand: Right, the gross margin before all of the costs.

Andrew: The office space and the people and all that. Do you release net margins? Are you guys profitable?

Rand: Yes.

Andrew: You are.

Rand: We’ve been profitable since December of 2008.

Andrew: Wow.

Rand: So, since, I think, every month actually.

Andrew: Can you say how profitable?

Rand: Sure. Let’s see, at that time, we had as little as about $250,000 in the bank, which made us pretty nervous at the time. And we’re now about right around 1.2, 1.3 million in the bank. So, we’ve put about a million dollars in the bank over the last year and a half.

Andrew: Oilman, why aren’t you out there copying his business? Get to work there. Sounds like a good business. All right. Let’s talk about some tips for the audience. First of all, Bing. You guys talk about them on your blog a lot. I haven’t seen any Bing traffic on my website or anything that I’ve been involved with. Is Bing sending significant traffic?

Rand: Not right now, no. I would say that they’re sending around, if you get 100 visits on a keyword from Google, I would anticipate that if you’re ranking equally well on Bing, you would get between six and ten. Depending on the vertical.

Andrew: Is it competitive enough for us to figure out ways to get more traffic? I mean, is there enough traffic there for us to figure out how to get more of it?

Rand: The interesting thing, I think the research work that we did, one of the nice things about this correlation study is that it really revealed the answer is not build towards some algorithm at Google, build towards some algorithm at Bing. it’s really, do a lot of good things right. You need to follow some best practices, there’s certainly some SEO tips and tricks. And advanced hardcore stuff that you can do really well. But, a lot of that stuff is around earning links and that’s kind of more classic marketing than just SEO.

It definitely appears to us that Bing’s ranking algorithm has been moving more and more in the direction of Google. And for that reason, as they take over Yahoo, as they continue to grow, do the right things for Google, you’ll be set for Bing.

I would expect that once the merger happens, and Bing takes over all of Yahoo’s traffic, they’ll be responsible for between 20 percent of queries that send traffic outside the search engine.

Andrew: So, if we want that share, we just need to do basically what we’re doing for Google. Because, they’re starting to mimic Google.

Rand: Yeah. I mean, unless you’re one of those Oilman types, right? Who plays in more of the Gray Black Hat field and you want to be playing on the borders and finding the links that’ll earn you rankings for a short period of time before getting banned or penalized.

In which case, there’s likely ones that’ll work in Bing and ones that’ll work in Google, and those might not be the same two.

Andrew: Where do you go to buy links today?

Rand: Nowhere. I just think it’s the most terrible decision that a serious, particularly an entrepreneur, who’s trying to build up a brand and a business, can make. Look, if you’re trying to, I want to rank for a Boston mesothelioma attorney and I’ll need to rank there for a month to make enough money to live on for the rest of the year, OK, fine. Spamming is probably the way you should go. In which case, I’m not your guy.

I just don’t know that world very well. But, if you are a serious business, you’re trying to grow and build a brand, build a website, have a lot of success, you need to be investing that money in great editorial content and fantastic marketing, good Puerto Rico, tremendously good product. Those things are gonna predict SEO success.

And probably doing a great job of getting all the basics right around how to create a very friendly website. Not having duplicate content, using rel=canonicals properly, using XML sitemaps properly. All that basic kind of stuff.

And then the layer on top of that. Of doing great keyword research. Figuring out what are the terms and phrases my audience is searching for, how can I get good conversion rates with those keywords. What do I need to do to essentially target new keywords that are coming out in my niche or sector? So, there’s lots of stuff that’s complex in SEO, that’s valuable to do, that’s entirely White Hat. Buying links is not one of them.

Andrew: I get e-mails all the time from people who try to buy links for my site for some reason.

Rand: Oh, yeah, sorry about that.

Andrew: [laughs]

Rand: That’s my bad.

Andrew: Not anywhere near you. It’s the scummy e-mails that I get. There’s nobody credible who’s sending out those e-mails. Let’s talk about low hanging fruit. What’s the easiest thing for anyone to do to start getting more traffic through search engines?
Rand: So, I’d really start with that pyramid process. At the base is, you have content that is unique and really valuable to visitors. And, not just valuable to visitors, but valuable to people who share links on the web. Think about the audience who owns blogs, contributes at forums, posts in newsgroups, writes news articles, has private websites that their sharing, has business websites where they’d link to you.

Who are those people? And, how are you gonna create content that appeals to them as well as to whatever your core business audience is. When you can combine those two and build that content, and then do a good job of promoting it and targeting it towards keyword phrases that you’ve done research on, that you know people are searching for, that’s the easiest way.

And, it can really begin with one good blog post. One great article, one terrific infographic. And you can feel out the success. You can see what other people are doing. It’s very much like entrepreneurship in all other ways, right? What’s the best way to get started building a company? Build one.

Andrew: [laughs]

Rand: You’ll learn so much.

Andrew: Who does it well? Who writes for the people who blog and the people who link and the people who talk?

Rand: The example that comes to mind right off the top of my head is Smashing Magazine. Holy crap. Those guys are in links like the web is giving them away. It’s very, very impressive to see their work on a consistent basis.

Andrew: Give an example. Sorry, go ahead, if you have another one.

Rand: Oh. No. I was gonna say, if you want, I’ll share a quick link here so you can get a sense. So, one of the things we do on Open Site Explorer, and this is actually a free part of the tool, but you can see the top most linked to pages on any website.

And, so I’m just gonna send the link here to the top most linked to pages on Smashing Magazine, which of course, is lots and lots of highly link worthy content. And this is a great tactic to see what your competitors are doing. If you want to figure out, how are they doing all this exciting stuff and earning all these links?

Andrew: Are you putting this in the chat room? In the live audience chat room?

Rand: Yes.

Andrew: OK. And, we’ll have to get this up in the comments.

Rand: So, where is M Live? All right. There you go.

Andrew: Oh, there we go.

Rand: Open Site Explorer and then just Smashing Magazine, top pages. You can see some of those include 100 Excellent Free WordPress Themes. Notepad Chaos. Data Visualization, Modern Approaches.

Andrew: Let me just read this to people who are listening to the MP3. It’s opensiteexplorer.org/www.smashingmagazine.com/alltoppages. If you go to opensiteexplorer.org, you’ll be able to get there.

Rand: Yeah.

Andrew: So, you just need to remember opensiteexplorer.org.

What about the guys who are a little more sophisticated? You mentioned Hacker News, maybe funded by Y Combinator, the maker of that site, or Texstars. Or have some angel funding. Basically, the guys who have created funded web apps. What are some things that you see that they just don’t get? Because they’re too busy building their app?

Rand: Well, one of the things that’s frustrating, actually, I was invited by Paul Graham of Y Combinator to come down to Silicon Valley and speak at one of their get-togethers for all their companies. And it was, man, it was awesome. I mean, I geeked out pretty hard. You know, I forced people to take my photo with Paul. I was so excited to get that invitation.

The thing that I found at a lot of the start-ups, they were thinking is that those people in particular have a phenomenal wealth of understanding about engineering and hacker methodology and how to bootstrap a business, but their focus on marketing is much less so. And, on SEO, they almost have a highly negative opinion. You can see a lot of threads on Hacker News, in fact, that are very negative. At the end of the talk that I gave at Y Combinator, Paul asked me, ‘Rand, is there something that the Y Combinator companies can do to say thanks for all the information?’

And I said, ‘Next time you see a negative thread on SEO pop up on Hacker News, you know what to do.

[laughter]

Rand: And that sort of experience, I think, of expanding people to think about SEO as, ‘Oh, it’s just a technical process and a marketing process, like anything else.’ Just like, how do I get mentioned in newspapers? How do I attract the attention of investors? How do I make a great product pitch? These all have processes, they have best practices. There’s creative things you can do, there’s technical things you should be doing, everybody should be doing. But, understanding those, just getting over that, ‘SEO is evil, SEO is bad, SEO is not a real thing.’ Getting over that mentality will help these people to get their really remarkable web apps and content and information in front of searchers.

Andrew: I see. OK. So, it’s not so much about one or two tips. It’s more about having that open mind and going out and searching the information that’s there.

Rand: Yeah. I mean, for those kinds of folks, for folks who are funded by Texstars, funded by Y Combinator, doing the small-scale or VC backing, just believe in SEO. Know that it’s a real thing. There’s hundreds of billions of searches happening every month. Those people all want something. You have something to sell to them. Don’t ignore it. Because, it’s not a zero-sum game. Someone else is getting that traffic if you’re not. Those people are doing searches and they’re landing somewhere else. You have an opportunity to win or lose out to your competitors.

Andrew: But, it’s such a process. I read your blog, I see all the guidebooks. I feel so overwhelmed, that I say, ‘Why should I bother learning SEO, which is a whole new thing for me, instead of focusing on the stuff that I know, like, maybe developing my site or developing my relationship with my customer or maybe even blogging.’ And then in the future, hiring someone to deal with SEO. It seems like that’s mostly their attitude.

Rand: I’ll say two things. Number one, 80 percent of the value you can get out of SEO is from 20 percent of that early work. Right? Build things right the first time. At least know the basics of technical SEO and problems that can happen.

Andrew: What’s in that 20 percent? 20 percent effort gets 80 percent reward.

Rand: Good URL structures, not having duplicate content, doing a good job of canonicalizing content, making stuff easy to be shared and link-worthy. Thinking about link-worthiness as part of your business model, not just as part of your SEO thinking after you’ve produced your business model.

And figuring out how you’re going to produce that unique and interesting content related to your business. Is that a blog? Is it articles? Is it user generated content? Is it something else that’s created? And the technical back end. So, good URLs, XML sitemaps, verifying with Google web master tools, making sure that you’re linking to content properly, not using java script and Ajax to refresh and redirect people. Being careful to move pages with 301 redirects, not 302s.

A lot of technical stuff that everyone thinks, ‘Oh, that’s easy. Every good developer worth their salt will do it.’ No, no, no. I can’t tell you how many phenomenally talented developers will build a website that works for humans that doesn’t work for a search engine.

Andrew: What about bloggers, finally? I’ve got a couple of other questions. But, finally, in this set of questions, bloggers. They’re using WordPress. Doesn’t that basically handle all the SEO for them? Or maybe they’re using Square Space or one of these other companies that supposedly is SEO friendly. Isn’t that enough?

Rand: In a lot of cases, the answer is yes. But, a lot of those bloggers don’t think about the marketing side of this, which is, ‘How do I create content that people will want to link to? That they will be incentivized to link to, inspired to link to? What is that content that is so shareworthy?’ Twitter is helping a little bit. Because, a lot of people are thinking, ‘How do I produce content that people will want to Tweet?’ And there’s a good overlap between those two. It’s not a one circle Venn diagram, but there’s a good overlap.

You need to think about, what are the sorts of things that earn links and references from the rest of the web, and how can I produce those things and get them on my site, as well as thinking about what are people actually searching for? If you don’t do keyword research, I mean, you can write phenomenal blog posts and rank for a whole lot of nothing. Or, a whole lot of things that no one is searching for. Those two things would be critical things for bloggers to be thinking about.

Andrew: OK. I looked at your site, and here’s something that I saw. I don’t know how involved you are in it, but, well, I’ll bring it up. The button to sign up for the Pro package on your site says, ‘Get signed up.’ I’m hearing from a lot of my friends, that that ridiculous phrase, nobody says, ‘Get signed up’ in person.

Rand: Yeah.

Andrew: They say, ‘Sign up. Sign up now. Sign up here.’ But, I’m hearing that that language converts more. Is that why it’s up there?

Rand: We do do a lot of landing page testing. Not a ton, but, I would not be surprised if it was suggested to us, actually, by conversion rate experts, who were the folks that we worked with last year to design a lot of our conversion funnel. And we’re gonna be launching a whole new conversion path and conversion funnel with a free trial model coming August hopefully. So, we’re doing a lot of that type of work.

One of the things I would say surrounding conversion testing is everybody’s different. So, if you hear, ‘Oh, green buttons do so much better than red buttons. Oh, you know what? This on top of the page does so much better than that on top of the page.’ Just make sure you test it yourself. I don’t think there’s anything wrong with the intuition of going across and using stuff.

One of the things that was most amazing to me was something that Wufoo does on their pricing page. wufoo.com. They put the highest price module on the left and then as you read across to the right, the modules get lower and lower priced until there’s the free one all the way on the far right. Apparently, just reversing those, and putting the highest price first, does price anchoring. Creates the psychology of anchoring, such that, all the other prices seem cheaper.

So, take that intuition, use it on your own site. But, don’t just copy without testing first. AB testing is so easy. Google website optimizer is free. Omniture tests and targets very powerful, it’s not for free, but there’s lots of great software around.

I think there’s even a site called Unbounce, which is a start-up down in the Bay area that does some great stuff around this, too.

Andrew: Unbounce?

Rand: Yeah. Unbounce.

Andrew: I’ll check that out. What have you found over the years as you’ve been getting more new members to register, what have you found works? Is it adding new content or is it adjusting the way you present it?

Rand: So, one of the things that was very surprising to us is, we loved those clean, simple, explains it quickly and easily, in a few words type of landing pages. And, we thought that was what was gonna work best for us. And, these conversion rate expert guys, they really proved us wrong. Launched a scrolly, long form landing pages that has a video at the top, has three scrolls worth of testimonials of all these people in our industry saying wonderful things about us, which is very nice, but, man, I hate those types of pages. How do those pages work? Well, they work really, really well. The answer was almost a full percent increase in conversion rating. And that spells another million dollars a year in terms of revenue for the business. So, we all have these personal biases against what we like, and we presume that others will like them as well. And when we talk to other people, if I connect with people like you, Andrew, I would bet that we would be on the same page about a lot of the things that we like and dislike on the web. And yet, I probably shouldn’t build my landing page based on what you and I like or dislike on the web. I should build it based on what converts my audience.

Andrew: Oh, well played. Well, thank you. Thanks for doing this interview. It’s great having you here.

Rand: My pleasure. Yeah, Andrew, it’s terrific to get together. I hope we get to meet in person someday.

Andrew: I do, too. You’re in Seattle, right?

Rand: I’m in Seattle. I’m gonna be down in Brazil next year for a conference. But, don’t have other plans.

Andrew: I probably will be up in Seattle before I see you down here in South America.

Rand: OK.

Andrew: I don’t know where I’m going next.

Rand: All right. Well, cool.

Andrew: Excellent. Actually, you know what, before you go, what do you think of Mixergy? What do you think of the interviews I’ve done here?

Rand: You know, I’ve been remarkably impressed. I’ve seen, I believe, four now. The one with Oilman and then two others with other entrepreneurs, and I like the model a lot. I’m very curious as to what your goals are around it and how you hope to scale and whether you hope to scale. But, I’ll save those for another time.

Andrew: All right. Well, thank you. Thanks for doing the interview. Thank you for watching, everyone. Guys, check out seomoz.com or .org. You’re probably gonna type in .com out of habit, which will take you over to .org anyway. And, check out some of the tools that we’ve talked about here. Thanks, Rand.

Rand: Thanks, Andrew. Take care.

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