The Hard Truths of Entrepreneurship

Rand Fishkin, Individual Contributor, Moz@randfish | rand@moz.com

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With a StoryLet’s Start

2001: Rand Drops Out of UW, Two Classes Away from Graduating.

Rand in 2001... Thank god for beards.

2005: After 4 Years of Hard Work, Rand & His Mom Have Built…

$450,000 in personal debt

2007: The Blog Rand Started to Learn More About SEO Helps Moz Pay Off Its Debt!

The SEOmoz blog, coded by Rand in PHP (meaning it barely worked).

Nov. 2007: Moz Raises $1.1mm from Ignition & Curious Office to Make Software

7 employees and $80K in the bank!

2009, 2010, & 2011: We Try to Raise Money Three More Times… All End in Failure

An email from an investor telling me not to lose sleep, just days before they pulled

out of our signed term sheet http://moz.com/rand/misadventures-venture-capital-funding/ and http://

moz.com/blog/seomozs-venture-capital-process

2012: Thankfully, We’d Stayed Profitable!

Our pitch deck to VCs in 2011: http://www.slideshare.net/randfish/seomoz-pitch-deck-july-2011

April 2012: We Meet Brad Feld; He’s Dreamy

Brad wrote about TAGFEE: http://www.feld.com/wp/archives/2012/05/seomoz-tagfee-and-me.html

We Raise $18mm w/ Foundry & Ignition

http://moz.com/blog/mozs-18-million-venture-financing-our-story-metrics-and-future

We Raise $18mm w/ Foundry & Ignition

My favorite coverage was from TNW: http://thenextweb.com/insider/2012/05/01/awesome-seomoz-uses-popular-internet-memes-to-announce-18m-funding-round

/

2012-2013: Moz Grows a Lot

Details from our CEO’s blog post on 2013 in review:http://moz.com/blog/mozs-2013-year-in-review

Past 12 Months: We Hit Some Rough Patches

More about this: http://moz.com/rand/cant-sleep-caught-in-the-loop/

Jan. 2014: Rand Steps Down as CEO

http://moz.com/blog/final-post-as-ceo-sarah-bird-has-the-conn

of Entrepreneurship…10 Years

6 Lessons to Share Today.

People & Hiring Matter(but not in the ways you might expect)

1

http://moz.com/rand/what-company-culture-is-and-is-not/

Most companies incorrectly reverse

these two.

Via: http://moz.com/rand/what-company-culture-is-and-is-not/

What Does “Culture Fit” Mean?

What Culture Is Not• Whether you rock climb/surf/ hike/watch NFL/etc• What kind of movies you like• Bean bag chairs• Nerf gun fights• Catered lunches• Mashed potato sculpting contests judged by your auditors at Deloitte (yes, we really did this at Moz, and it was totally fun)

What Culture Is

Shared Values

Shared Priorities

Stylistic Cohesion

ValuesMission & Vision

Hiring, Firing, & Promotion Criteria

Cultural Fit =

Via: http://moz.com/rand/what-company-culture-is-and-is-not/

Common Advice:

Hire slow. Fire fast.- Every management book & guru

Less Catchy, Better Advice:

Hire slow. Fire with a consistent, empathetic process.

- Moz

Why? Because consistency in evaluating people and giving them time to improve is essential to maintaining your reputation internally & externally. When firing happens fast, you create an environment of fear, uncertainty, & mistrust.

Humility is the Most Underrated Attribute

2

In my experience, those who think highly of themselves are

very hard to work with, and those who don’t think about

themselves lackself-awareness.

In my experience, both confidence & arrogance are

correlated w/ poor results, while self-deprecation is often

correlated w/ the right kinds of humility.

Core Values Are Hard(not having them is way, way harder)

3

Moz’s Core Values: TAGFEE

Transparent

Authentic

Generous

Fun

Empathetic

The Exception

We share what we do, what we learn, and where we struggle openly and honestly.

We will be our true selves, never masking our beliefs for commercial gain.

We seek to give without thought of return.

Work is only work if you make it so.

Our most important value – we strive to share the emotions & experiences of others.

We strive to be the exception to the rule, and to take the path less traveled.

http://moz.com/rand/diving-deep-on-tagfee/

Moz’s Core Values: TAGFEE

TransparentAuthenticGenerousFunEmpatheticThe Exception

Real values come from a deep,

personal place in the founders’ past/beliefs.

Real values are disconnected from

opinions about what will make the

business succeed.

When things go well, values are easy.When things get rough, values are important.

“The core values embodied in our credo might be a competitive advantage, but that is not why we have them. We have them because they define for us what we stand for, and we would hold them even if they became a competitive disadvantage.”

- Ralph S. Larsen, CEO of Johnson & Johnson

http://www.jimcollins.com/article_topics/articles/good-to-great.html

Core Values Are the Glue that Holds Vision, Strategy, Team, & Everything Else Together.

http://moz.com/rand/vision-based-framework/

Your Team Is Absorbing Far Less Information than You Think

4

Like most CEOs, I sent emails, presented at team meetings, and expected people to internalize that information.

This is not the face of a smart man.

Note: the percentages on this visual don’t have credible research behind them (though the broader concept does): http://acrlog.org/2014/01/13/tales-of-the-undead-learning-theories-the-learning-pyramid/

Assuming knowledge that’s been shared once (or even a few times) has been internalized by everyone can create fatal pitfalls.

The same type of distribution happens internally at organizations, too.

If Management is the Only Way Up, We’re All F***’d

5

In Many Organizations, the Only Path for Career Growth is to Become a People Manager

Career path illustrations from a variety of companies & fields

See Daniel Pink’s Illustrated Video: http://www.youtube.com/watch?v=wdzHgN7_Hs8

What Makes Us Happy at Work?

Many people are not motivated or made happy by managing others

And, People Managing is NOT the Only Skill of Value to a Growing Company

http://moz.com/rand/if-management-is-the-only-way-up-were-all-fd/

At Moz, We’ve Built Two Tracks with Equivalent Compensation & Recognition

http://moz.com/rand/if-management-is-the-only-way-up-were-all-fd/

Pay ranges at each level are the same across both tracks.

At Moz, We’ve Built Two Tracks with Equivalent Compensation & Recognition

http://moz.com/rand/swapping-drivers-on-this-long-road-trip-together/

I recently made the move from people wrangling to individual contributor myself!

Building a company is really just a cycle of failure & learning that, from a distance, resembles overnight success.

6

http://buttersafe.com/2008/10/23/the-detour/

A lot of days feel like this:

We compare ourselves and our success to outliers rather than norms, and this brings great unhappiness.

We Imagine Entrepreneurship Looks Like This:

In Reality, It Looks More Like This:

Geraldine’s Travel Blog: http://everywhereist.com

Geraldine started her blog in 2009

In Reality, It Looks More Like This:

For 2 years, she never broke 100 visits/day.

In Reality, It Looks More Like This:

This is where most people give up.

In Reality, It Looks More Like This:

These days, she gets 100,000+ visits each month

In Reality, It Looks More Like This:

Every first-time founder I’ve ever talked to shares a story that looks a lot like this one.

You are not alone.

In Reality, It Looks More Like This:

The Price of Success is Failure after Failure after Failure*

* Hopefully, each of those failures provides an opportunity to learn.

1) Moz is by no means perfect.

Critical Caveats:

2) Getting this stuff right does not guarantee success.

3) These lessons were hard learned by me & Moz. I share them in the hopes of saving you that same pain.

Rand Fishkin, Individual Contributor, Moz@randfish | rand@moz.com

The Hard Truths of Entrepreneurship

Online: bit.ly/mozhardtruths