Why I’m thankful Moz didn’t move to the Bay Area

seattle-supermoonIn 2009, we tried to raise money. We talked to people at 40 different firms. We had second meetings with 16 of the partners we spoke to. And at the end of the process, we had a couple offers contingent on moving the company to the Bay Area, where our potential investors could be “more helpful.”

We walked away.

This fundraising adventure was chronicled in a lengthy blog post I wrote at the start of 2010. It didn’t end well, but Moz’s story since has been fairly exciting.

We stayed profitable from 2008-2012, and grew our software’s subscription revenue from $1.1 million to $21.9 million. In April 2012, we raised $18 million led by Foundry Group, and now have one of the world’s most well-known and exceptional investors, Brad Feld, on our board.

Throughout our company’s life, we’ve stayed in Seattle, — ranked #7 on the NVCA’s Top 15 Cities for Tech Startups. Here’s why I’m glad we stayed in Seattle, and why I wouldn’t trade that #7 for a #1, 2, or 3:

  • Seattle is home:  It’s my home, and it’s home to the 136 other Mozzers who make up our remarkable team. We have lives here, familes here, friends here, pets here. We actively chose to make this city our home, and forcing people to revisit that decision purely for work feels like we’re taking away one of the key freedoms startups are supposed to enable.
  • Cost of living:  It’s cliche to mention, but any cost-of-living calculator will show that $120,000 salary in San Francisco buys the same housing/groceries/utilities/etc that an $86,367 salary does in Seattle.
  • Talent competition: In Seattle, a startup that scales to a million dollars in revenue profitably stands out from the crowd, and earns the recognition and appreciation of their peers. In the Bay Area, Moz wouldn’t rate on any of the “interesting” scale of startups at all. We’d be waging battles for talent with hundreds of better-funded, more press-coverage-earning competitors, and we’d be paying 20-50 percent more for every position we hire.
  • Longer Tenures:  My friends in the Bay Area get together and talk about how two years with the same startup is “a lifetime.” In Seattle, that’s still perceived as a very short tenure. Culturally, I think the latter attitude is far healthier. It’s hard to get into a flow and contribute at a high level in the first 6 months at a new job. And it’s really hard to imagine the recruiting process resetting for every role every 12 months. How do you build a company culture in a place like that?
  • Work/Life Balance Culture:  The environment in Seattle doesn’t focus on the slow weeks being “only” 60 hours, like the Bay Area seems to. Our team does occassional stretches with heavy hours, but plenty of folks rarely put in more than 50, and I think that’s healthy. I don’t believe that working hours 55-90 produce very much that’s useful or valuable, and I hate to have that be the standard everyone expects (investors, recruits, competition, etc).
  • Patience:  The Seattle market is patient. As a startup that’s taken many years to get where we are (and didn’t have “overnight” success), we’re constantly grateful for the attitude that growing to eight figures of revenue in six years is still pretty darn impressive. I’d hate to be constantly compared to companies who’ve done more in half the time, but I see that in the tech world all too often, and almost always in relation to Silicon Valley and San Francisco.
  • Geography is No Limitation: I feel no pain or lack of connections/network from being in Seattle. Last year at GROW in Vancouver, I got to meet David Cancel of Compete/Performable/Hubspot, someone I’ve long admired and been inspired by. Events like this happen worldwide and grant exposure to an amazing group of geographically diverse folks. So long as you’re willing and able to travel, in-person connections can happen anywhere.
Rand Fishkin in the KIRO studios. (Erynn Rose photo)

Rand Fishkin on the GeekWire podcast. (Erynn Rose photo)

I remember those feelings of guilt and of nervousness after our failed funding round in 2009. I wondered if I’d made the wrong call, and if Moz could ever become the company we wanted to be by staying in Seattle and rejecting those offers.

But, looking back, I’m so glad we made the decision we did.

I’m proud to call Seattle home, and I hope we can serve as one of the thousands of examples that building a tech-startup doesn’t just happen in one or two geographies.

Rand Fishkin is CEO of Moz, a Seattle-based software company specializing in inbound marketing. Follow him on Twitter @Randfish

Editor’s note: Moz is a GeekWire annual sponsor.

  • http://www.tatango.com Derek Johnson

    Great article Rand. It’s pretty surprising how many people I talk to that say that if we’re really serious about raising an A round, we have to get out of Seattle and move down to SF. I’ve gotta admit though, people in SF are thinking way bigger than we do here in Seattle. Every time I go down there, my mind is blown by the conversations, ideas and vision of those living in that place.

    • http://moz.com/Rand Rand Fishkin

      I haven’t seen as much of the “big thinking” being exlcusively concentrated in the Valley. But I do agree that there’s a certain attitude of invincibility in many early-stage or pre-starting-their-startup technology folks down there. I find it offputting on a personal level, but it could indeed be a good thing for a startup community.

  • Jmartens

    Great post, I kept my young company in Portland for the same set of reasons.

  • http://www.dennisjsmith.com/ Dennis J. Smith

    Great guy. Got to meet you in Boise through my friend Josh.

    • http://moz.com/Rand Rand Fishkin

      Very kind of you to say! Looking forward to my next Boise trip (though probably not until after your crazy hot summers) :-)

  • RogWilco

    I don’t know, to a certain degree it sounds light post-rationalizing decisions after they were made. I think reality sits somewhere closer to the middle – both areas have their ups and downs. Having lived and worked in the tech industry in both regions they each have things the other can’t offer. I think either decision would have been a great one, just for different reasons.

    • http://moz.com/Rand Rand Fishkin

      Very fair point. For the kind of business I want to build and the types of people I want to work with, I’m pretty confident Seattle was the right choice, but I recognize that the Bay Area has a unique set of advantages, too.

  • ruchitgarg

    Would love a debate between Rand and Aaron Levie ;) maybe a topic for next fireside chat at geekwire summit…

    • dnprock

      I certainly look forward to it.

    • http://moz.com/Rand Rand Fishkin

      I’m in!

  • MrGreem
    • johnhcook

      Thanks. If you are involved in this case directly, please email me as I have a few more questions about it. I’m at john@geekwire.com and I’m an editor here at GeekWire. Thanks.

  • http://flippa.com/blog Ophelie Lechat

    We hear a lot of similar arguments here in Australia for why companies stay in Melbourne versus moving to Sydney, or even why they decide to stay in Australia as opposed to moving to SF. It’s heartening to see one of my favourite companies take a balanced view of the pros and cons of moving to the Valley.