Learn how Oleg Shchegolev grew SEMrush from $0 to over $50 million in revenue.
Davis Baer: What’s your background, and what are you working on?
Oleg Shchegolev: My name is Oleg Shchegolev, and I am CEO and co-founder of SEMrush, an online visibility management and content marketing SaaS platform. SEMrush ensures marketers are well equipped to increase their revenue and achieve online visibility for any business. We started off as an SEO toolkit but now SEMrush encompasses a number of different tools, ranging from SMM to content marketing. Currently SEMrush has revenues between $50 million and $100 million.
What motivated you to get started with your company?
For someone with my background, it wasn’t that unusual. I was introduced to SEO when I was a third-year information security student. SEO was pretty simple back then and I quickly learned a thing or two about it. Dmitriy Melnikov (SEMrush’s co-founder) and I were experimenting and trying out different things, and that’s how the SEOquake tool was released in 2006. SEOquake was a success and inspired by it, we decided to turn it into something bigger — that is how SEMrush was created.
We started at the height of the financial crisis of 2007–2008, so you can imagine how uneasy it was for us to be a startup in such challenging times. I had no idea that only some ten years later we would end up heading an international company with 500 employees and more than 2 million users. Just recently we celebrated our 10th anniversary — feel free to congratulate us!
What went into building the initial product?
I can’t say we had in mind some intricate and elaborate plan for how to develop our product and gain an upper hand in the market. Basically we were experimenting with the product, with no specific idea regarding what we were planning to have in the end. The main criteria was our own satisfaction with the product. Everything was a mess, but then we started to get an idea of what SEMrush would look like. Huge volumes of code and lots of inconsistent (at first) efforts eventually turned SEMrush into the beauty that it is now.
How have you attracted users and grown your company?
At first, we just distributed SEMrush among our friends. We knew quite a lot of people from the IT industry who weren’t unwilling to try out a new product. The freemium business model, which had been around for quite a while by then, wasn’t very popular, but we decided to stick to it. We distributed promo codes, and allowed our users to use the product for free and pay for additional options. It worked.
What’s your business model, and how have you grown your revenue?
Like I said, as a startup we didn’t shy away from distributing our product to some of our potential customers for free as we considered this a great way to raise awareness about the new high-quality product. Being greedy kills your business.
Also, we were relying on bootstrapping for quite some time, basically until very recently, when we raised $40m in investments. I believe that at the initial stages of business development, bootstrapping is advisable, because otherwise your startup can collapse under the weight of outbound investments.
What are your goals for the future?
We intend to keep adding more useful tools to our suite and upgrade the existing ones. Right now SEMrush is considered as an online visibility platform that helps marketers to save their time, facilitates strategy planning and provides opportunities to understand what is happening in your niche and market. Bigger databases, more keywords, and a greater variety of digital marketing tools will be integrated into our platform. In particular, starting this August, we’ve added mobile data to our traffic analytics and now our traffic data is much more accurate. We are also working on expanding our content marketing tools that facilitate the workflow for content specialists. Becoming a trusted web data provider is one of our targets as well. Web data from the SEMrush platform has already been published in major media outlets all over the world and we expect this to continue.
We’ve got a couple of other awesome tricks up our sleeves, but we’d like to keep them a secret for a while. Stay tuned.
What are the biggest challenges you’ve faced and obstacles you’ve overcome? If you had to start over, what would you do differently?
The biggest challenge was to stick to bootstrapping for so long, but it was very consistent with our commitment to experimenting and to developing our product the way we wanted it to be. With outbound investments your business becomes to a certain degree dependent on external support — this is what many companies seek. The main challenge for us was to keep growing as a company with our own money as a source of the growth. There’s no point in sticking to bootstrapping for good, though. This is why we chose to raise investments when the right moment came.
Have you found anything particularly helpful or advantageous?
I think my commitment to perceiving the company as a living organism was really helpful in developing SEMrush. As every organism, business passes through certain phases and stages, and since SEMrush has been growing rather rapidly, we have always had to implement changes throughout our business journey.
Agile has also definitely helped in building the working processes the right way and I consider having teams who are independent, self-organized and incredibly engaged in the working process to be really helpful.
What’s your advice for entrepreneurs who are just starting out?
I would advise businesses not to stick to cargo cult mentality, i.e. not try to mimic successful outcomes by replicating things that are not relevant to your business. Forget other businesses’ models and practices if they are not suitable for what you do. Too many people get carried away by motivational advice and reproduce techniques that are completely out of place in the context of their own business. Don’t turn your brainchild into a simulacrum. Instead of aligning yourself with others, do your best to build a business that will be benchmarked.
I would also advise entrepreneurs to look into a thing called “survivorship bias”. It’s when people ignore the experiences of millions of failed companies and only explore successful businesses instead. Don’t exclude others’ failures from your performance studies. Things are not easy, and there’s a good reason why so many companies fail. Few businesses make it past their first few years and enjoy sustainable growth years on. Instead of being overly optimistic and then failing, you’d rather be more conservative in your business forecasts and actually succeed.
Where can we go to learn more?
Semrush.com. Feel free to ask me any questions in the comment section, I’ll answer each of them!