Central Perk

joi, 30 ianuarie 2014

Moz's 2013 Year in Review: More Than You Ever Wanted to Know About Moz, and Then Even More

Posted: 29 Jan 2014 03:09 PM PST

Time for the 2013 end-of-year wrap-up. You can read Rand's 2012 wrap-up here. The "T" in TAGFEE is for "Transparency," so let's get this show started.

This is a long post. Here are some convenient links to whatever tickles your fancy:

Four Big Investments in 2013

Community & Customers

Inside Moz HQ

Technical Achievements

Looking Forward

If long-form blog posts aren't your thing, I invite you to check out our Moz 2013 Year In Review Infographic extravaganza!

Four Big Investments

1. The rebrand from SEOmoz to Moz

We'd been planning the rebrand from SEOmoz to Moz for about 18 months before we executed. The original plan was to launch the rebrand simultaneously with the release of Moz Analytics. Ah, yes. What a lovely dream!

When it became clear that Moz Analytics wasn't going to be ready before May, we decided to decouple the rebrand from the product launch.

The rebrand went amazingly well. Better than we anticipated. Most people weren't surprised, which I think is a good thing; we had been seeding the idea of "Moz" for a long time. Recently, Search Engine Land released study results indicating that Moz is the second-most recognized marketing technology brand. Happily, 85% of people who listed us correctly used "Moz" instead of "SEOmoz." Whoa!

We suffered a slight dip in traffic after the switch from seomoz.org to moz.com, but managed to recover quickly. <high five> You can see our traffic stats in the Community and Customers section below.

2. The epic nine-month launch of Moz Analytics

We began launching Moz Analytics in May and are only now wrapping up the final phase of launch. Rebuilding the old PRO application from back to front was the biggest and highest-risk endeavor we'd ever undertaken. Including product planning, we worked on it for two+ years, and a team of engineers spent 18+ months building it.

The Moz Analytics launch deserves a thoughtful blog post on its own. I tried to capture the complexity, disappointment, and excitement when drafting this post, but it's just not possible.

So I'll just say this: Launch diverged dramatically from the plan. Some of it was forgivable naivetÃ© about the complexity of the project, and some of it was just plain old stupid mistakes. All of the factors were valuable lessons.

I'm relieved and happy to say that we're wrapping up the "launch phase" of Moz Analytics very soon. We've almost solved the the critical bugs, and soon we'll be launching some critical features (like monthly timeframes) that weren't quite critical enough to block public release.

3. Building data centers in Virginia, Washington, and Texas

We create a lot of our own data at Moz, and it takes a lot of computing power. Over the years, we've spent many small fortunes at Amazon Web Services. It was killing our margins and adding to product instability. Adding insult to injury, we've found the service... lacking.

We spent part of 2012 and all of 2013 building a private cloud in Virginia, Washington, and mostly Texas.

This was a big bet with over $4 million in capital lease obligations on the line, and the good news is that it's starting to pay off. On a cash basis, we spent $6.2 million at Amazon Web Services, and a mere $2.8 million on our own data centers. The business impact is profound. We're spending less and have improved reliability and efficiency.

Our gross profit margin had eroded to ~64%, and as of December, it's approaching 74%. We're shooting for 80+%, and I know we'll get there in 2014.

4. Growing the Moz team

We ended the year with 134 people on the team. In 2013, we brought in 47 new people, nearly a person each week. We also saw 16 people move on. That's a tremendous amount of change and growth on top of a high-headcount growth year in 2012. It's invigorating and humbling when I think of the talent we've brought together at Moz. Check out our Annual Report Infographic for lots fun extras on the team.

Financial Performance

Revenue grew 33% last year and ended at $29.3 million.

That is off-plan performance. It could have been even worse. Quarters 1 and 2 were actually really strong, and in a subscription business, the year is made by Q1 and Q2 net adds. In the second half of the year, though, we lost momentum while in launch mode.

What happened? Many books will be written by many historians on what happened at Moz in 2013. (Okay, maybe not.)

Here is a list of contributing factors, in no particular order (like I said, this is really a much bigger topic than we can squeeze into this post):

Delayed launches of the rebrand and Moz Analytics (MA)
Customer unhappiness from some nasty bugs at launch
Customer unhappiness from some high-priority features not included at launch
Lower-quality leads than hoped through the invite list for MA
Compromised marketing funnel during the transition time from the legacy PRO app to MA
Mismatch between marketing materials and launch offering

It feels really good to have this launch nearly behind us. I'm looking forward to the next phase of the product development cycle: iterate, iterate, iterate. And we'll take the lessons of this launch with us into all of our future projects.

Our Cost of Goods Sold came in at approximately $10.8 million.

The vast majority of this spend is Amazon Web Services, listed here as "Cloud Services" (see the section above on data centers for more context). While building our data centers and moving our systems over, we paid for both the data centers and Amazon. In 2014, we should see a substantial reduction in Cloud Services because we'll have moved almost entirely off Amazon.

Our Gross Profit Margin for the year came in at 63% overall, but it was up to 70% and climbing in December. Data centers FTW!

For those of you curious about what we spend money on, feast your eyes:

I've included the expense as a percentage of revenue to better express how the business scales. Notice the growth in Personnel (headcount- and benefits-driven), Professional Contractors (the fleet to help us get Moz Analytics out the door), Office Expenses (doubling our square footage means more supplies and snacks!), and the arrival of the Data Center Depreciation line.

Yes, you're reading that right. The percentage of revenue is greater than 100% when you add it up. We're not profitable this year. We're ending the year with a $5,754,925 EBITDA loss (that's fancy accounting-speak for how much money was left over after you paid the bills).

We knew we were going to burn in 2013. That's why we took the $18m Series B. This is a bigger loss than we planned on, though, and we're disappointed we missed our goals.

The good news is that we have enough capital to keep growing the business, and we're really excited to have the hairy launch behind us and a clean platform on which we can start iterating. We expect to be profitable in Q3 of this year.

Community & Customers

At the end of the year, over 25,000 people had Pro subscriptions.

Over 21,000 of those accounts are paying subscribers.

On the one hand, I'm disappointed because I don't think we met our potential. We have the skills, resources and passion to build the best Inbound Marketing Analytics software on the planet. We're on the path, but we're not there yet. The whole team is picking up the pace. The destination keeps moving too, which is part of the fun.

It was a pretty amazing year for web traffic. We're seeing a little dip here at the end of the year, but we averaged 2.9 million uniques per month. Wow.

Our organic search traffic rose by 28% this year, even with the little hit we took during the transition from SEOmoz.org to Moz.com.

Our community engagement metrics increased really nicely this year. (Thanks if y'all are still reading this!) Also, people LOVE Whiteboard Friday. Can you believe folks watched over 35,000 hours!?

Inside Moz HQ

I already mentioned the team growth in my Big Four above. What I didn't talk about is how awesome it is to be a part of this team.

Can you believe that combined we donated over $100k to charity in 2013?! Mozzers gave $41k+ to their favorite charities. Moz contributed $63k+ as part of our 150% Moz Match program. That's an average of ~$783 per Mozzer.

I'm really proud of this number. It shows me that I work with people who believe the world can be a better place and are willing to do something about it. It excludes the time Mozzers have donated; We should start tracking that, too.

The Annual Report has a complete list of the organizations we've helped.

It's hard to capture what it feels like to work at Moz. This list helps:

Technical Achievements

We've already talked about building Moz Analytics and the new data centers. Those are major achievements, but they aren't the only things we've been busy with. Au contraire.

Moz is an increasingly complicated business. We have loads of tools. Even if you're a long-time Moz fan, I bet we have tools you've never seen. We've been making investments in some of our key tools and the back-end infrastructure to support complex web properties.

Launched Fresh Web Explorer in April 2013

We're really excited to offer a simple, high quality mentions-tracking tool. This is one of our most powerful features, but is still a relatively hidden gem. Do yourself a favor and go check it out. It's better than Google Alerts, and way cheaper than enterprise-y mention trackers.

Relaunch GetListed in May 2013

We acquired GetListed in 2012 and did a complete back-to-front rebuild in early 2013. The rebuild improved scalability, reliability, speed, and allowed folks to log in to GetListed with their Moz accounts. The improvements laid the groundwork for an upcoming launch that we can't wait to share with you! The new release will be a major step forward in listing management.

Followerwonk Improvements

Check out Social Authority Score and our Partnership with Buffer.

Open Site Explorer Improvements

We added Just Discovered Links to Open Site Explorer in May 2013. We're working hard to get you fresh link data. There will be more to come in 2014.

Sexy Behind-The-Scenes Stuff

Well, we think it's sexy. We rebuilt our billing system (rapture!), updated our email management back-end (joy!), and created a unified authentication system to tie all our different web properties together (hallelujah!).

Looking Forward

Things are starting to move fast around here, and that's a good thing. There is a renewed sense of energy. Launch is behind us, and we can focus on bug squashing, tuning, and adding some critical MA features like monthly timeframes, a keyword-not-provided solution, and a content section. We're getting a little bit closer each month to our goal of 80+% gross profit margin (GPM). The launch of our Moz Local v.1 is in alpha testing as I write.

For the next several months the company is focused on (1) Increasing retention by making happier customers, (2) Acquiring new customers by improving the funnel and driving high-quality traffic to the site, (3) Getting to 80% GPM, and (4) Launching and learning from our v.1 Local product.

Rand and I are settling into our new roles, and the whole team is starting to rock a faster, more iterative approach to building software. We're also learning our way around our brand spanking new digs. If you're in Seattle, you should come say "hi."

Did I mention the Annual Report?

Sign up for The Moz Top 10, a semimonthly mailer updating you on the top ten hottest pieces of SEO news, tips, and rad links uncovered by the Moz team. Think of it as your exclusive digest of stuff you don't have time to hunt down but want to read!

Seth's Blog : The four horsemen of mediocrity

The four horsemen of mediocrity

Deniability--"They decided, created, commanded or blocked. Not my fault."

Helplessness--"My boss won't let me."

Contempt--"They don't pay me enough to put up with the likes of these customers."

Fear--"It's good enough, it's not worth the risk, people will talk, this might not work..."

The industrial age brought compliance and compliance brought fear and fear brought us mediocrity.

The good news about fear is that once you see it, feel it and dance with it, you have a huge opportunity, the chance to make it better.

• Email to a friend •

miercuri, 29 ianuarie 2014

Mish's Global Economic Trend Analysis

California Students File Constitutional Challenge to Teacher Firing Practices; Unions are the Child Molester's Best Friend
Humorous Reporting Regarding Effect of Tapering on US Treasuries; Robotic "Righting"
Disgusting Compromise on $956B Farm Bill; In Spite of Massive Howls, No Actual Cuts in Food Stamps
California Water Synopsis: Water Woes Just Beginning or About to End? Good News for California?

California Students File Constitutional Challenge to Teacher Firing Practices; Unions are the Child Molester's Best Friend

Posted: 29 Jan 2014 06:23 PM PST

Three cheers for a group of nine California students who are fed up with tenure rules that protect not only incompetent teachers, but also sexual predators.

Reuters reports California students challenge teacher employment rules in lawsuit.

A group of nine California students will challenge employment rules they complain force public schools in the most populous U.S. state to retain low performing teachers, as opening arguments kick off on Monday in a lawsuit over education policy.

The lawsuit seeks to overturn five California statutes that set guidelines for permanent employment, firing and layoff practices for K-12 public school teachers, saying the rules violate the constitutional rights of students by denying them effective teachers.

Among the rules targeted by the lawsuit is one that requires school administrators to either grant or deny tenure status to teachers after the first 18 months of their employment, which they complain causes administrators to hastily give permanent employment to potentially problematic teachers.

"The system is dysfunctional and arbitrary due to these outdated laws that handcuff school administrators from operating in a fashion that protects children and their right to quality education," attorney Theodore Boutrous of the education advocacy group Students Matter said in a media call.

The plaintiffs are also challenging three laws they say make it difficult to fire low-performing tenured teachers by requiring years of documentation, dozens of procedural steps and hundreds of thousands in public funds before a dismissal.

Lastly, the plaintiffs want to abolish the so-called "last-in first-out" statute, which requires administrators to lay off teachers based on reverse seniority.

The group says that the layoff policy disproportionately affects minority and low-income students, who are more likely to have entry-level teachers and poor quality senior teachers assigned to their district.

"When the layoffs come, the more junior teachers are laid off first, which ends up leaving a higher proportion what we call the 'grossly ineffective' teachers," Boutrous said. "It's really a vicious cycle."

Teachers' Union Response

"We don't think stripping teachers of their workplace professional rights will help students," said California Federation of Teachers President Joshua Pechthalt."

Mish Translation of Teachers' Union Response

Teachers first.
We don't give a damn about the kids.
We protect the incompetents and the molesters alike.
Molesters pay dues, kids don't.
Those dues pad our pockets.
Padding our pockets allows us to bribe legislators for more rules we want.

Testimony Started Monday

The lawsuit was filed by the nonprofit advocacy group Students Matter, which contends education laws are a violation of the Constitution's equal protection guarantee because they do not ensure all students have access to an adequate education.

The LA Times reports Testimony begins in trial over California teachers' job protections.

Arguments begin Monday in a lawsuit challenging the constitutionality of laws that govern California's teacher tenure rules, seniority policies and the dismissal process -- an overhaul of which could upend controversial job security for instructors.

The lawsuit, filed by the nonprofit advocacy group Students Matter, contends these education laws are a violation of the Constitution's equal protection guarantee because they do not ensure all students have access to an adequate education.

Vergara vs. California, filed on behalf of nine students and their families in Los Angeles County Superior Court, seeks to revamp a dismissal process the plaintiffs say is too costly and time consuming, lengthen the time period for instructors to gain tenure and dismantle the "last hired, first fired" policies that fail to consider teacher effectiveness.

The lawsuit aims to protect the rights of students, teachers and school districts against a "gross disparity" in educational opportunity, lawyers for the plaintiffs said.

Many students — overwhelmingly those who are minority and low-income — are destined to suffer from ineffective and unequal instruction because administrators are unable to remove ineffective teachers from schools, attorneys said.

Students Matter was founded by Silicon Valley entrepreneur David F. Welch, a research scientist who went on to co-found Infinera, a manufacturer of optical telecommunications systems based in Sunnyvale, Calif. The group is partly funded by organizations known for battling teachers unions. The foundation of Los Angeles philanthropist Eli Broad, which has backed numerous education initiatives, also supports it.

Gross Lie of the Day

In the gross lie of the day category, "The California Department of Education contends districts have the opportunity and discretion to remove ineffective teachers from classrooms and decide whether to grant tenure."

In contrast, L.A. schools Supt. John Deasy, is a supporter of the effort to repeal the statutes. He declined to comment because he is a witness in the case.

Lay it on them John!

Unions are the Child Molester's Best Friend

I am quite sure Deasy can testify how hard it is to get rid of incompetent teachers, even child molesters.

If you think I am making this up, sadly, I am not.

I highly recommend reading the LA Times report: Failure Gets a Pass L.A. Unified Pays Teachers Not to Teach.

You can find similar articles about New York, in fact, anywhere unions rule.

Every time I write something like this I get a ton of emails from teachers. Surprisingly, about a third of them are in support of what I say.

In Praise of Teachers

I have said this before and I say it again: I have nothing against teachers. Most of them are dedicated, hard-working professionals.

I do have everything against public unions whose sole mission is to collect dues and coerce legislators into laws written for the union at the expense of the kids.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Humorous Reporting Regarding Effect of Tapering on US Treasuries; Robotic "Righting"

Posted: 29 Jan 2014 12:18 PM PST

I happen to like US treasuries on the basis the economy is slowing much more than anyone thinks.

Short-term, who knows? Certainly not those who intend to call every uptick or downtick as if it's meaningful, especially on days of economic news, like today.

Here is an image that shows what I mean.

I did not stitch that together. The items were back-to-back on a news feed site I follow.

Which is it?

At 2:20 PM Bloomberg reported Treasuries Rise
At 2:20 PM MarketWatch reported Treasuries Fall

Here is another MarketWatch image.

Click on the MarketWatch "Treasuries Fall" link and this is what you see.

Robotic "Righting"

This kind of nonsense happens all the time. Headlines change from Bonds Fall Because of Tapering to Bonds Rise Because of Tapering. Very few notice how ridiculous this reporting is, or how headline stories change 180 degrees in seconds.

May as well have a robot "write" these stories. Perhaps I mean "right" these stories. Or is that what's happening already?

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Disgusting Compromise on $956B Farm Bill; In Spite of Massive Howls, No Actual Cuts in Food Stamps

Posted: 29 Jan 2014 10:09 AM PST

Proving that neither party really wants to do anything about escalating costs of anything, in typical D.C. compromise action, the House Passes $956B Farm Bill in a bipartisan vote.

Speaker John Boehner (R-Ohio), and Majority Leader Eric Cantor (R-Va.), and Minority Leader Nancy Pelosi (D-Calif.) all voted for the bill.

Democrats are howling over miniscule cuts in SNAP (food stamps). For example, an inane headline on the Daily Koz reads House passes food stamp-slashing farm bill.

Supposedly there will be $8.6 billion in devastating food stamp cuts. Even if that happens it is less than a 1% cut in an economy that is supposedly in recovery.

Contrary to Popular Belief, No Cuts in Food Stamps

Will there be any cuts? I rather doubt it. In the "too stupid to make up category", this is how they determined the cuts.

The bill finds $8.6 billion in savings by requiring households to receive at least $20 per year in home heating assistance before they automatically qualify for food stamps, instead of the $1 threshold now in place in some states.

Amazing!

Now what do you think will happen? If you can't figure it out, I will tell you. States will give $20 per year in home heating assistance to everyone currently getting $1 per year in annual home heating assistance.

There will be miniscule (if any) savings at all at the federal level, and small increases at the state level.

Crop Subsidies Preserved

Next consider House passes farm bill, crop subsidies preserved.

After more than two years of partisan squabbles over food and farm policy, the House passed and sent to the Senate Wednesday an almost $100 billion-a-year, compromise farm bill containing a small cut in food stamps and preserving most crop subsidies.

The measure, which the House approved 251-166, had solid backing from the Republican leadership team, even though it makes smaller cuts to food stamps than they would have liked. The bill would cut about $800 million a year from the $80 billion-a-year program, or around 1 percent. The House had sought a 5 percent cut.

The legislation also would continue to heavily subsidize major crops for the nation's farmers while eliminating some subsidies and shifting them toward more politically defensible insurance programs.

House Agriculture Chairman Frank Lucas, R-Okla., who has been working on the bill since 2011, called the compromise a "miracle" after years of setbacks.

For those seeking reform of farm programs, the legislation would eliminate a $4.5 billion-a-year farm subsidy called direct payments, which are paid to farmers whether they farm or not. But the bill nonetheless would continue to heavily subsidize major crops — corn, soybeans, wheat, rice and cotton — while shifting many of those subsidies toward more politically defensible insurance programs. That means farmers would have to incur losses before they could get a payout.

Miracle Not

It is beyond idiotic to call this do-nothing compromise a "miracle". It's a do-nothing bill for which D.C. is famous.

It would have been a miracle had there been any real cuts.

Actual CBO Estimated Savings

The facts speak for themselves.

In spite of the trumped up $8.6 billion in savings in food stamps and smaller savings on farm subsidies, "The bill would save around $1.65 billion annually overall, according to the Congressional Budget Office."

Assuming the CBO is correct, the actual savings on the bill is $1.65 billion out of $956 billion. In percentage terms (drum roll please) .... the devastating cutbacks amount to 0.17%!

Oh! The Horror!

Republicans and Democrats alike should both be ashamed, not only for doing virtually nothing, but also for howling at the moon as if they did.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

California Water Synopsis: Water Woes Just Beginning or About to End? Good News for California?

Posted: 29 Jan 2014 09:19 AM PST

Leaving aside religious debates on global warming, UC Berkeley professor B. Lynn Ingram says California water woes could be just beginning.

As 2013 came to a close, the media dutifully reported that the year had been the driest in California since records began to be kept in the 1840s. UC Berkeley paleoclimatologist B. Lynn Ingram didn't think the news stories captured the seriousness of the situation.

"This could potentially be the driest water year in 500 years," says Ingram, a professor of earth and planetary science and geography.

"These extremely dry years are very rare," she says.

But soon, perhaps, they won't be as rare as they used to be. The state is facing its third drought year in a row, and Ingram wouldn't be surprised if that dry stretch continues.

The NewsCenter spoke to Ingram about the lessons to be drawn from her research as California heads into what could be its worst drought in half a millennium.

Q: California is in its third dry year in a row. How long could that continue?

A: If you go back thousands of years, you see that droughts can go on for years if not decades, and there were some dry periods that lasted over a century, like during the Medieval period and the middle Holocene. The 20th century was unusually mild here, in the sense that the droughts weren't as severe as in the past. It was a wetter century, and a lot of our development has been based on that.

The late 1930s to the early 1950s were when a lot of our dams and aqueducts were built, and those were wetter decades. I think there's an assumption that we'll go back to that, and that's not necessarily the case. We might be heading into a drier period now. It's hard for us to predict, but that's a possibility, especially with global warming.

Magic Words

With that, Ingram, just mentioned the unmagic words "global warming". Is that a contrary indicator?

Perhaps.

Here is another one: Ingram is the author of The West without Water What Past Floods, Droughts, and Other Climatic Clues Tell Us about Tomorrow.

Typically, such books mark extreme sentiment and the end of such trends.

Hundred Years of Dry

Want a third contrary indicator?

If so, I have one: Ecocentric, "all things green from capital hill" reports Hundred Years of Dry: How California's Drought Could Get Much, Much Worse.

Good News Coming?

I delayed commenting on the California water crisis recently, rather expecting something like this January 28, 2014 report: El Nino May Return as Models Signal Warming of Pacific Ocean.

An El Nino weather pattern, which can parch Australia and parts of Asia while bringing rains to South America, may occur in the coming months as the Pacific Ocean warms, according to Australia's Bureau of Meteorology.

Most climate models suggest the tropical Pacific will warm through the southern autumn and winter, the bureau said in a statement today. Some models predict this warming may approach El Nino thresholds by early winter, it said. Australia's autumn runs from March to May and winter is from June to August.

El Ninos, which are caused by the warming of the Pacific, affect weather worldwide and can roil agricultural markets as farmers contend with drought or too much rain. An El Nino trend is likely to develop this year, Gavin Schmidt, deputy director of NASA's Goddard Institute for Space Studies in New York, said this month. It's been almost five years since the last event, which typically occurs every two to seven years, according to Indonesia's Meteorological, Climatology and Geophysics Agency.

"Less spring rainfall for the east coast would be the major concern" for Australia, said Paul Deane, an analyst at Australia & New Zealand Banking Group Ltd. in Melbourne. "It increases the chance that we're not going to get trend wheat yields, that would be one of the risks. The other one would be on livestock, where you'd have lower pasture growth."

OK But What About California?

That's a good question.

Wikipedia has this to say about El Niño conditions in North America.

"Winters, during the El Niño effect, are warmer and drier than average in the Northwest, northern Midwest, and northern Mideast United States, so those regions experience reduced snowfalls. Meanwhile, significantly wetter winters are present in northwest Mexico and the southwest United States, including central and southern California, while both cooler and wetter than average winters in northeast Mexico and the southeast United States."

Personally Speaking

Living in Illinois, Northwest of Chicago, I certainly can use less snow and less cold. We have had numerous days of negative temperatures this month, coupled with plenty of snow.

Enough!

Global Warning

My global "warning" about global "warming" follows.

Cyclically-speaking, I tend to believe another El Niño effect is on the way. If so, it will bring relief to Southern California.

Thus, short-term I suspect Lynn Ingram is off the mark. Books and hysteria mark tops and bottoms. Besides, we have strongly presented viewpoints about pending cyclical changes.

However, Ingram could easily be correct on a long-term basis.

Either way, none of this has anything to do with global warming. For a detailed explanation, please see Europe Dumps Global Warming Efforts; Good Idea?

Addendum:

The California Weather Blog has an interesting article some inquiring minds may wish to read: Ridiculously Resilient Ridge continues to shatter records, but pattern shift may be approaching

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com