Rand Fishkin was the founder of Moz, a software used to help website owners improve their SEO rankings. He started out running a marketing agency helping companies improve their rankings on Google.
But he quickly realized that running a marketing agency was labor-intensive, and scaling such a company would be difficult. He had the idea to build a software product to help businesses improve their performance in search results.
When I ran into Rand Fishkin’s Lost and Founder, I was immediately hooked. This book talks about his entrepreneurial struggles and how he built Moz into one of the leading SEO software companies today.
This is no ordinary business memoir. I have rarely run into a book where the business owner is so raw and honest with the struggles he faced.
All successful startups have a story on how they growth-hacked their way to success. For Moz, their growth can be attributed to organic exposure on Google. This comes as no surprise since these guys were the SEO experts. But what is interesting is that between 2003 to 2007, Fishkin wrote over 1000 blog posts on the Moz blog. That is a lot of writing and worth remembering for everyone trying to have their work discovered organically.
Obviously, Fishkin being an SEO expert had a competitive advantage in how to optimize his articles. Nevertheless, the fact that even an SEO export published over 1000 articles goes to show how much important it is to produce exceptional content consistently.
Fishkin called this growth model Moz’s flywheel. When he was planning the next article, he would perform keyword research first. He then published the article, optimized it for the right keywords, and pushed out the article to email subscribers and RSS feeds.
Next, he would promote the article on social media and got his fans to share the content. This led to more traffic on the website and higher domain authority. By repeating this process for years, Moz became the go-to authority blog in the field of SEO.
This story served as a valuable reminder for me. I built a blog in a niche field (epoxy flooring) by regularly publishing articles and videos in that space. I never got round to publishing 1000 articles, but more like 50.
Today I get thousands of monthly organic hits thanks to work I did years ago. All that traffic from my blog serves as a great lead generator. Never underestimate the process of publishing good content that provides answers to your readers.
Outside Funding is Overrated
Throughout the book, Fishkin tells several stories about how venture capital is never as rosy as it really seems. Rand Fishkin admits that although he made a comfortable income as CEO of Moz, he never became rich despite running a successful SaaS business.
One of the interesting points he makes is that venture capitalists tend to have very different incentives than founders. The startup founder may be perfectly happy (or even ecstatic) with a 20 or 50% growth rate year on year.
On the other hand, venture capitalists are going after the asymmetric unicorns. They are not interested in small gains. They will make 30 bets on 30 startups, and they know 28 of those will fail, but maybe one or two of those 30 will acquire massive value.
Therefore investors will often push and push the founders to take on more risk and to grow faster. The irony of such a situation is that the founders start feeling nervous and overwhelmed by such expectations, which leads them to sabotage their success.
Family Businesses can get Messy.
Before starting Moz, Rand Fishkin ran a marketing agency with his mother. Fishkin tells the story of how they started taking on additional debt to grow their business while at the same time hiding all the extra debt from his father. You might think that this stuff sounds messed up, but let me tell you, it happens far more often than you believe in family businesses.
I, too, was involved in a family business, where there was quite a similar dynamic. We convinced ourselves that we were growing and that therefore taking on extra debt was justified.
Although the business survives to this day, that extra debt became a real burden for us. We never saw the magical growth rates that we expected. In the end, we had just dug ourselves a deeper hole to get us out of.
Rand Fishkin talks about the importance of transparency, and believe me, that can be messed up in a family business. Communication within a family is usually based on habits and dynamics that have shaped your family for decades.
Take the Money and Run
Back in 2006, Mark Zuckerberg famously turned down Yahoo’s offer to buy Facebook for a Billion dollars. This story has become part of Silicon Valley folklore, and many writers use the example to show Zuckerberg’s focus and determination.
While I have great admiration for what Zuckerberg achieved, this story is a classic example of survivorship bias. Facebook turned out to be very successful, but many other startups failed, although they could be bought out.
Rand Fishkin tells a very painful story of how he turned down an offer from Hubspot for $25 million, some of which involved getting shares in Hubspot. At the time, he believed that the offer from Hubspot was not very attractive.
Fishkin never had another opportunity to sell at that price. Hubspot changed direction, and they were no longer interested. Today, the value of Hubspot has appreciated significantly, and his shares would be worth far more than the $25 million that he was offered.
Moral of the story: Don’t focus on what outliers like Facebook or Uber did. If you get an attractive offer that could change your life, take the money and run.
Rand Fishkin has been in the trenches. He openly talks about his struggles and disappointments. He talks about letting his staff and customers down. At one point, he took on a few side projects and lost focus in his core business.
His company’s performance tanked, and investors were not happy. Even though I do not run a tech business, I felt that I could relate to most of his stories.
Lost and Founder is an exceptional business book. I read a lot of business books per year, and quite a few of them get abandoned. My time is valuable, and I do not want to read another book with superficial advice.