How we grew our 8-figure ARR by +65% two years straight (with a team of 30 and no VC)
Here at Ahrefs, we don’t like to obsess over metrics.
But at the risk of bragging, here’s one number we’re proud of:
We’ve grown our ARR by more than 65% two years straight (+83% in 2016 & +65% in 2017).
How did we achieve this, you might be wondering; surely such exponential growth must be thanks to some genius set of hacks, a team of magic-making marketers?
Our success comes down to a handful of simple golden rules. And if you were expecting any earth-shattering revelations, you might be disappointed.
But first things first. Here’s a little bit about us, to give some context for the rest of the article.
Ahrefs is a toolkit that helps clients grow their organic search traffic from Google. We give you data on a website’s search performance, as well as the search performance of your competitors.
We also help make sense of this data, so that you know how to outrank all of your competitors.
We started as a small player battling in the arena with giants. And yet, our growth hasn’t slowed down one bit.
Here’s how we do it.
1. A product that wins ‘the comparison test’
We’re not the only tool of our kind, and we certainly weren’t the first in the market. A market which, for the record, is pretty damn crowded, with a ton of new players entering every year.
This is what we’re up against:
We’re operating in a crowded landscape, to say the least. But with a superior offering, none of that matters.
Our main focus always has been — and always will be — our product.
People rarely sign up for the first thing they discover; they will research what’s available and weigh up their options before making a decision.
So, we figured that the only way for us to wrestle with all those big, trusted brands — and their loyal audiences — was to win ‘the comparison test’.
Think about it.
Consumers are always on the lookout for smarter ways to spend their money. They talk to their peers, attend industry events, read specialist publications. They stay clued-up, and they can’t be tricked.
Yes, habits are hard to break and people tend to stick with what they know. But a glittering alternative will attract attention, arouse curiosity and sow a small seed of doubt:
“What is this product? Is it better than what I’m using?”
And so the FOMO begins.
The first seed is unlikely to make someone give up their habits. Nor the second.
But as I outlined in my previous story, a great product guarantees new seeds will continue to be sown — until they grow into something customers can’t ignore.
And while your existing customers know that your product is superior, they will be your vocal advocates — especially in a niche market like ours.
It’s true that personal endorsement is the best form of advertising.
Amazon’s Jeff Bezos agrees:
“You used to be able to win with a mediocre product, if you were a good enough marketer. That is getting harder to do.
The right way to respond to this is to put the vast majority of your energy, attention and dollars into building a great product or service and put a smaller amount into shouting about it, marketing it.
If I build a great product or service, my customers will tell each other.”
So how can we get the mighty word-of-mouth engine roaring?
Enter ‘the comparison test’. The ultimate win.
In order to cross the finishing line, you need to understand what it is that your prospective customers value MOST when they compare their product options.
- Is it the functionality?
- Is it the sleek UI/UX?
- Is it the learning curve?
- Is it the amount of hand-holding?
- Is it the variety of integrations?
- Is it the price?
Of course, all of these things matter. So by nailing one of them, you’re only going to win over the chunk of the market that considers this aspect the most crucial.
And that’s a good place to start.
Take us as an example.
In the early days of Ahrefs, Dmitry (our CEO and Founder) focused all his attention on the quality of our data. That’s where his background lay, and that’s what he thought he could do better than anyone else.
And he was right; he could.
That’s how Ahrefs got its reputation as the best source of SEO data. But on the flipside, our design, usability, and marketing? They weren’t great.
And yet we were still successfully attracting customers who valued data over everything else.
We retained these customers, and they told their friends about us. Because no one else could match the quality we provided.
Fast forward to today. Thankfully, we’ve upgraded our UI/UX, nailed content marketing and released various educational resources.
But our data still remains our biggest asset.
It’s what makes us win countless rounds of the comparison test — even when every other aspect of our product is more or less equal to others’.
So here is the takeaway:
Identify what makes you stand out in your ‘comparison test’ and invest in it — big time.
When you’ve nailed this, you can begin to focus more on other aspects of your product, such as UI/UX, responsive support, etc.
We believe it’s better to be incredible at one thing than average at lots of things.
This naturally takes you to the next step: who do you need to achieve this?
2. How to hire and when to fire
Our team of 30 competes successfully with companies that count 150–400 employees.
How do we manage to win the comparison test with significantly fewer human resources?
Well, it all boils down to our — admittedly slightly unorthodox — hiring rules.
2.1. Closing the gap
The most popular advice when it comes to hiring is that “it’s never too early” to do so.
We disagree. In fact, we only bring people in when the need is so evident that it almost reaches a crisis point.
I joined Ahrefs as a CMO nearly three years ago. And for more than a year I was running a marketing department of one — myself.
I was given permission to hire anyone I wanted, but I didn’t want to hire for the sake of it. I wanted to hire help where it was really due. I wanted to understand the nature of each role.
That’s why I started out by doing everything alone; wearing lots of different hats, so to speak.
For starters, I let go of the freelancers who wrote for the Ahrefs blog at the time and took over myself.
This gave me a clear vision of our content marketing strategy. And it was only when I had more ideas than I could handle on my own that I posted our first copywriter ad.
Of course, the need for great content was evident from the start. But how do you know when to close a gap without understanding why that gap needs to be filled?
How do you know a new hire is doing a great job of closing that gap if you’ve never tried to close it yourself?
You need to be hands-on before you can go hands-free.
Dmitry has followed this principle throughout the building of Ahrefs’ development team.
2.2. Vetting talent
What’s the basis on which you hire someone? You interview them, of course, to find out if they’re good at what you want them to do.
But that only works if you are an expert in that field, too.
If a candidate spends a few hours googling common questions and lingo, they may well bluff their way through an interview looking far more accomplished than they really are. Especially if they are being questioned by an HR person or recruiter with no prior knowledge of the topic.
That’s why we don’t have HRs; we handle the hiring process on our own from start to finish, putting one person with relevant expert knowledge in the driving seat.
For instance, Dmitry’s core competency is programming. His skillset helped him to spot the talents of our incredibly smart CTO, Igor.
Igor now personally interviews every new hire. And it’s impossible to impress him with a bunch of buzzwords.
That is why our devs team is small, but each member is extremely proficient at what they do.
“If you always hire people who are smaller than you are, we shall become a company of dwarfs.
If, on the other hand, you always hire people who are bigger than you are, we shall become a company of giants.” — David Ogilvy
But what if you need to hire someone for a position where you have very little competency?
Well, here comes my story.
When we agreed that Ahrefs needed a facelift, we didn’t have an expert to put in charge of hiring. None of us had enough of knowledge of web design and UI/UX to identify the kind of talent we were looking for.
But what I do have — after working in the marketing department of a web design company — is people in my network that I can ask for help.
So I made the most of that. I used my contacts to learn where to hire a great web designer, and how to vet their skillset.
As a result, we hired two people who previously worked at Russia’s #1 web design agency.
That’s how Ahrefs interface went from this:
3.3. Letting go whoever doesn’t fit
Our hiring process isn’t perfect.
Every now and then, we ignore our own rules and hire people without having any chunk of work for them, just because they had impressive resumé.
And we’ve sometimes taken on a questionable candidate just because the need was too pressing.
But when we made mistakes, we realized sooner rather than later. Because in a 30-person team, you can’t hide when someone’s a bad fit or is giving a lacklustre performance.
Hire slow, fire fast, as they say.
Sounds harsh? We don’t think so.
Keeping a person in a position that isn’t a good match for them is doing them a real disservice.
3. The KISS principle
Essentially, we prefer not to complicate things in any way. That’s why we follow the KISS principle.
KISS stands for: Keep it simple, stupid. We apply this approach to everything we do — even marketing.
If you’re CMO, you have to religiously track ‘crucial’ SAAS metrics like CAC, LTV, churn, retention — right?
Not if you’re CMO at Ahrefs.
If you were to ask me:
“what’s our CAC from different marketing channels? How do cohorts from these channels perform over time?”
I wouldn’t be able to tell you.
That’s because we don’t track these types of metrics.
We did previously set up some advanced analytics, but after releasing a few product updates, the numbers went wild due to a slight misconfiguration.
To avoid this happening again, we needed to hire someone whose only duty would be to set up these metrics and ensure they ran smoothly.
But what would be the point?
When we initially measured these numbers, we said “Aha!”
…. and then we went back to doing exactly what we were doing before.
Not because we were stubborn or lazy, but because for every aspect of our product, we could clearly see the issues that needed to be resolved already.
By applying common sense, not fancy analytics.
Because at the end of the day, changing the color of your CTA buttons or cramming more emails into your lead nurturing sequence won’t win you the comparison test.
A phenomenal product is the only weapon you need to take to battle.
“Their product is absolutely amazing, I get a ton of value from it. But they only sent me one onboarding email and there was no product tour, so I cancelled.”
You haven’t heard anyone say this. We haven’t either. That’s because no one’s ever said it.
Instead of getting carried away with little marketing tricks that might (or might not) improve our numbers by a percentage or two, we keep it simple.
And according to our annual growth rate, simplicity seems to be working pretty well for us.
The only metrics that we care about are MRR/ARR, and their growth rate over time. As long as these are satisfactory, we’re doing just fine.
So, what about you?
What we wanted to do in this article was give an honest insight into our golden rules here at Ahrefs. Perhaps they resonate with you, perhaps not.
We admit that our approach contradicts the industry best practices in many ways.
But it works for us. It’s what we attribute our growth to.
Maybe it could work for your company, too.
- Each market is different. The rules that apply to our market might not apply to yours. In the startup world, you won’t get any funding unless you impress VC’s with your CAC, LTV, churn, etc. Luckily we don’t need any funding, because we’re 100% bootstrapped.
- What worked for us in the past 2 years might not necessarily keep us afloat in the next 2 years. But we’re open-minded and lean enough to change our direction if we see our growth slowing down.
For the time-being, we’ll continue to keep our focus firmly on the strength of our product, the talent of our people and the straightforwardness of our marketing. No hacks, tricks or fancy analytics required.
Sometimes, less is more.