By Gillian Muessig (Co-Founder & President, SEOmoz)
I began my company in 1982 and raised three children under my desk. The youngest will tell you the color of the blanket on which he napped under that desk, so I’m being literal here. I set up shop as a marketing and graphic design consultant (read: glorified unemployed). I was determined to raise the children myself, rather than farm them out to daycare and nannies, so I set ground rules for my business activities that naturally hampered the growth and prosperity of the company. I knew what I was trading off, but I set up the company entity and took in jobs as I was able. I just got on with it.
Regardless of what hampers your ability to get into business today, just do it. Form your corporation, set up the paperwork and begin. The longer you wait, the more easily your dream of building a company will slip from your fingers.
Fire Your Lowest Value Customers
Because I was consulting, often with an infant in one arm and a briefcase in the other, I took on only those clients who were comfortable with that scenario and I often made price concessions to accommodate the unusual arrangement. As the children grew, so did the company. And with the growth of a real company, the price I charged needed to grow as well. If you’re starting out as a consultant or do any consulting as part of your business, fire your 4 lowest performing clients every year. If you’re selling products or services on a more scalable basis, still look at your lowest performing customers and consider how to either make them more profitable or fire them and focus on the highly profitable groups. You cannot be all things to all people. Focus.
Listen to the Sounds of the Marketplace and Pivot Early
My original company was a marketing consultancy. Over time, we added online services such as websites. In 2001, the year of the dot-com crash, we needed to pivot and do it fast. Capital expenditure budgets we slashed and no one wanted to buy websites. When I went out to make the rain fall, a few potential clients pointed out, “I have no capital budget for a website, but I have operating capital. If you bring me a dollar, I will give you a corner off the dollar.”
I knew what that was — commissioned sales online. I didn’t even have the words “Affiliate Marketing” to wrap around the idea. It wasn’t what we did for a living. But I researched and learned quickly. I created rev-share contracts with vendors in niche markets that appeared to have solid brick and mortar companies, but were not meeting their potential in online sales. It wasn’t a scalable, billion dollar business, but it kept the company alive when many in similar straits were going down in flames.
Regardless of what you’re selling today, it may not be popular or even salable at all tomorrow. Listen to the sound of the economy and pivot early or your company will be one of the victims, not one of the survivors of downturns or major shifts in the marketplace.
Know What You’re Building and If/How You Will Scale
I hired my eldest son in 1997. We tested several ideas while using the rev-share process to fund the company. In 2003, Rand began writing the blog, SEOmoz.org. It was comprised of daily blog posts, followed by increasing amounts of comments, finally amounting to more of a forum than just a blog.
After about a year, SEOmoz.org was fast becoming the hub for the industry’s conversations around organic search marketing (SEO). “SEO” stands for Search Engine Optimization; “moz” was a bow to d-moz or mozilla, representing user generated, freely shared, open source content; and “.org” was a strong signal that we weren’t planning to make any money with it.
While we made millions of dollars for our consulting clients and took a corner off the dollar as payment, we wondered what project we could deploy in which we would receive the whole dollar. We tried several ideas, but none seemed to be a good fit for our skill set. With 15,000 people subscribing to the RSS feed on the SEOmoz blog, we knew there was strong potential there. We didn’t want to simply monetize SEOmoz.org with AdSense. That was the kiss of death for blogs in the search marketing space.
Instead, we did share a few tools Rand had developed to make SEO consulting work easier and better and we shared some Guides on specific SEO topics. While most of SEOmoz.org remained free and open to all, we tried offering these few tools and guides on a monthly membership subscription basis, which called SEOmoz PRO. In the first day, we sold three memberships. Three months later, we had over 100 memberships. Our course was evident.
It’s YOUR Company; Act Like It
A final word. My legacy at SEOmoz and in the world of entrepreneurship will have nothing to do with SEO, Search Marketing, or Cloud Marketing. It has to do with the concept of communities. Corporate structures are communities and as the head of your company, you get to design what it looks like. Take a firm hand in this area and never let go of it. Everything else can be handed off, including the highest levels of strategy, if you keep everyone on the same page about your corporate values.
At SEOmoz, we operate under the tenets called TAGFEE. It isn’t something we hang on the wall (although we have a seriously cool info-graphic with an explosion view of Roger Mozbot explaining the TAGFEE tenets hanging in the office). It isn’t something HR shoves down everyone’s throats. We LIVE this stuff.
Because of this extremely tight knit community in the office, we are able to spread our way of doing business to our customers and colleagues in the industry. I see no reason why people should leave their personal values and ethics at home when they go to work and I’ve not only passed that on to the CEO of SEOmoz, I’ve had the good fortune to be able to serve on the Boards of companies in four continents and speak on the subject around the world. I am so passionate about the way I set the ground for SEOmoz to grow, that my legacy is no longer about SEOmoz. It’s about a better way of doing business.
This is your company. Put your rudder deep into the waters of your personal ethics and keep the company on a steady keel. Never abrogate your own idea of what’s right or wrong and make sure you explain it clearly to your staff every time you have to make a decision based on your own core values. Hire only those who believe in what you’re building and want to join you in the effort. Hire FIRST for personality and support of your core values; then look for the skill set. It will take a long time to hire; that’s ok. If you make a mistake, fire quickly.
If you’re going to build a company, make it a legacy your great grandchildren will be proud to say was yours.
Don’t start a company without knowing your end game. Decide whether you want a lifestyle business, such as a consultancy or other small (but still potentially extremely profitable) business or whether you want to build out a scalable idea and be acquired or go public in the future. Identify potential buyers and build to that goal. Your end game and even your vision of the size of your company and the number of employees you want will change often along the way. That’s ok. Adjust and keep your end game in sight at all times.
About the guest blogger: Gillian Muessig is Co-Founder & President of SEOmoz, providers of the world’s most popular Search Marketing Marketing software. SEOmoz.org serves a community of 400,000 search marketers around the world. The SEOmoz blog is read by more than 50,000 SEOs each month. Known as SEOmom throughout the industry, Gillian serves on the Board of Advisors for companies in four continents. Email her at email@example.com or follow her on Twitter at @SEOmom.