I'm surprised that they were unprofitable. How does a consulting business with great brand recognition, in an industry that's still growing fast, not make boatloads of money? They should be like all those Whateverilents of the late 90's, paying people $50/hour and billing them to companies at $200/hour. (At least, I know of plenty of companies that would pay that much, and plenty of SEOs who would make that much -- and having a middleman with the best brand name in the business could definitely make it happen).
byrne - I think you might have misread the piece; we were profitable when we took investment the first time and are profitable again now. The "dip" was during a period when we burned the investment capital to grow faster.
And yeah - our rates are $1,000 per hour, which helps moderate demand, but we rarely outsource anything (and even when we do, it's to other very high priced vendors). Strategic SEO (vs. the tactical keyword research, link building, site editing, etc.) requires lots of deep knowledge.
Interesting. I figured the most likely explanation was that you were investing in growth. I just assumed you were more like McKinsey, less like Amazon.
$1,000 an hour! Definitely gives me something to shoot for! I've noticed that in my SEO work, too: the first 10% of the work (planning and strategy) seems to have many times the value of the next 90% (the research and implementation). It's just tough to charge wildly different amounts for the same person's time. I guess doing just that first 10% is a solid solution.
So what gives?