In 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.
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.