After Some Challenging Pivots, Moz Digs Deeper for Growth
It’s been an interesting year for Moz, the Seattle-based SEO software company with solutions for local SEO. After several years of fast growth pushing into a variety of different marketing products (like social media, keyword research, and topic analysis), the firm announced last August that it was laying off 28 percent of its workforce in order to refocus on its core competencies. While a hard decision at the time, Moz CEO Sarah Bird says the pivots have paid off: the company has now had seven months of cash flow positive and the business is growing.
Recently, Moz also announced that its beloved founder and “Wizard of Moz” Rand Fishkin would be stepping down from day-to-day operations after 16 years, though he is remaining the company’s board chairman.
We caught up with Bird a couple of weeks ago at MozCon, the annual search and content marketing conference the company puts on, to talk about how the changes this year have affected the company and where she sees the digital marketing industry headed.
You’ve had a tricky twelve months with Moz. Tell me a little about how that has gone.
We made some big decisions last August to really double down on our core SEO products, and those were the products that had the most traction and also were easiest for us to provide great value to customers in and we’re seeing the most growth potential. So, that also had the benefit of reducing complexity, pretty substantially, for us. … We killed two other products, and it was painful, because there are people who put their heart and their soul into those and no one likes to see their hard work mothballed.
How do you figure out after investing so much time and energy that “this is the kind of thing that we do, and that’s the kind of thing we don’t do?”
I think that is the art of leadership — because if you use the wrong metric you can inadvertently kill innovation, and if you’re too dogmatic about it, you can have blinders on that can lead to death. Blinders can make you blindsided to competitive threats that you need to pay attention to.
At the same time, you know, it was definitely true that we were fighting a war on too many fronts and in a well-funded, highly competitive, marketing tech industry. And so it was clear that we needed to do some focusing. And this is a little mercenary, but we simply went through each product, very rigorously, and we said, “Okay, first of all, how profitable is the product today, its current metrics, as it is? Is it making money? And is it growing?” And then once we did that pass, we did the secondary sort of, “Okay, well, strategically, that’s where it is today, strategically, where can it get to?”
Do you have to weigh how some products play off of each other?
Yeah. Certainly. That’s absolutely true in the sense that we kept the local product, which we’re really proud of, and the core SEO flagship product that we have play very nicely together. One of the really fascinating, interesting, exciting, challenging, baffling, energizing things about how SEO is changing is this different SERP topography, that it’s there’s different kind of SERP results, and it’s not as simple as 10 organic links anymore.
So, the local places results and map results are now such a critical part of that SERP page that it played nicely together. It made a lot more sense than “Let’s keep a Twitter analytics part of our business, and an SEO part of the business,” which didn’t have a strong overlap.
We’re hearing a lot about how voice search could potentially change SEO and SEM with an environment where there’s only one search result. How important is that to your strategy?
I think everyone is keeping a very close eye on voice search. For the sake of clarity, I think it’s important that we’re very precise about what we mean when we say “voice,” because some people, when they say “voice search,” mean voice-initiated: I ask my Alexa or my Google Home and it will give me a result. Other people mean voice results, and you know voice-initiated has changed the kind of search terms.
I actually think it’s wonderful for our industry. People are just searching more, and searching in more different ways. It’s just become ambient, you know? Search is now all around us. It’s in your car. It’s on your kitchen counter.
The data shows that more and more people are searching. So, that’s actually really exciting. That, for me, is one of the reasons I’m so highly motivated and excited about the search category. I think we’re actually on a next wave: mobile brought a wave, and I think this is a whole other wave of search: ambient search.
How has Moz’s mission evolved?
The mission is to help everybody do better at SEO through software education and community. So, it is a very search-optimization-centric mission.
We started as a pure SEO company, and then we saw the rise of social media, and we saw the rise of content marketing after that, and that’s what led us down this piece of, “Wow, these things all have in common that they’re earned media, top-of-funnel earned media type activities, so we should explore a strategy of branching out and doing these sort of adjacent product offerings.”
And at that time the mission was a “better marketing” mission, and what I like about that is that’s how we always felt about SEO: that SEO has this beautiful thing in being entirely responsive the customers’ needs. You’re not interrupting them. You’re not forcing anything down their throat. They’re looking for it, and then you can provide it, and that appeals to me as a consumer; it’s how I want it to be.
And then, as we discussed a little earlier, we realized that there was a lot of operational complexity in that — and that social media on its own and content marketing on its own are highly funded segments of this industry, and we’d have to then compete against those highly funded segments. And meanwhile the core SEO products, the new local one we had launched and our flagship product, were performing best for us and starved for resources. So, hence this refocusing back to SEO.
What are your thoughts on competition and consolidation within the industry?
I think that my biggest competitor is actually not another SEO or local listings management company. I think that my biggest competitor has been and remains paid advertising, because people are addicted to the simplicity and the seemingly easy trackability of paid advertising — dollar in, dollar out.
That market is absolutely gigantic, you know, tens of billions of dollars on that same search results page, all of the money is going into these paid ads — and yet the research clearly shows that the clicks and the attention go to all the organic pieces (I’m including featured snippets and places in that organic, because it’s earned media). And that is a huge imbalance in the market. It’s mind-blowing that the actual click is going to organic, but all the spend is going, by orders of magnitude, to this other part of the search result.
I think that the challenge before Moz and everybody in the SEO industry is in explaining to marketers that they just need to shift their budget. Not that paid is “bad” — because it’s not. They just need to work in tandem. The smart marketing department is thinking of both a short-term strategy and how paid can help, and also building out their long-term, competitive mode, where they’re going to get the most value for their search.
In terms of competition, it’s interesting how much overlap there is between different companies in the space, and that there isn’t necessarily a core thing that works.
I don’t think that we have crystallized, as an industry, around the language, and I think that the good work we still have to do is to engage both the media and analysts and the venture capital and private equity community to help them understand that there is an industry here.
Even the thought and the maturity of thought at the capitalization level of the public market, private equity, venture capital level, it’s not there. The peak practitioners who do digital marketing and who are in and out of our products every day, they get it. But that maturity of thought has not grown up a capital chain yet, and I think that that is actually part of the problem of why we haven’t seen some consolidation that we should, or some big exits that we should, because I just don’t think the education and the awareness is there.
Where are you in Moz’s investment cycle?
We’re cash-flow-positive. We’re adding cash. I don’t have any desire, near term, to take on any other investment right now. We have gone aggressively toward cash flow to give us some more risk capital, so we can make some more bets that are in line with our current future vision, and so I hope to be part of this consolidation story, in the sense of I would like to hopefully pick up a partner or two that’s going to add some pieces to our strategy.
David Hirschman is a co-founder of Street Fight. This interview has been edited for length and clarity.