In the dynamic sphere of digital marketing, the tale of Hardbacon, a Montréal-based FinTech startup, is a poignant illustration of the hazards associated with depending excessively on a singular marketing acquisition channel. Hardbacon, known for its free budgeting app and its revenue generation through lead generation and affiliate marketing for financial products, recently declared an impending bankruptcy due to a severe decline in its Google traffic. This decline stemmed directly from Google’s algorithm updates, which aim to combat spam and elevate genuinely helpful content.
Founded in 2017 by Julien Brault, Hardbacon initially concentrated on assisting retail investors in analyzing and managing their portfolios. However, after encountering difficulties in monetizing the app through subscriptions, the company pivoted in 2020 to offer a free budgeting tool. This shift aimed to generate revenue through lead generation and affiliate marketing, linking consumers with financial products such as credit cards, bank accounts, and insurance. The strategy appeared promising, especially after the company raised approximately $3 million CAD in funding and amassed 50,000 registered users.
Despite its initial success, Hardbacon’s dependency on search engine optimization (SEO) for traffic emerged as a critical vulnerability. In September 2023, Google introduced its “helpful content update,” designed to prioritize original, beneficial content while de-emphasizing SEO-driven and AI-produced material. This update resulted in a staggering 97% reduction in Hardbacon’s Google traffic, a setback from which the company could not recuperate.
Google’s algorithm updates aim to enhance the quality of search results by prioritizing user-centric, genuinely helpful content. Although this goal is commendable, the updates can inadvertently impact businesses heavily reliant on SEO for traffic. For Hardbacon, the precipitous drop in traffic precipitated a significant revenue decline. Despite efforts to improve content and cut expenses, the company was unable to rebound. Julien Brault, Hardbacon’s CEO and co-founder, expressed frustration over the consequences of Google’s updates, noting that while the changes effectively targeted spammy websites, they also adversely affected legitimate enterprises like Hardbacon. Brault’s experience highlights the challenges faced by companies reliant on SEO for their viability.
Hardbacon’s predicament is far from isolated. Several businesses dependent on SEO have experienced the repercussions of Google’s algorithm adjustments. Companies such as HouseFresh, New York Magazine, GQ, Urban Dictionary, and Tuta Mail have all witnessed traffic fluctuations due to these updates. This scenario prompts critical questions regarding the responsibility of search engines and the necessity for businesses to diversify their marketing approaches. Google’s dominance in the search engine market exacerbates the issue, with more than 80% of the global search engine market share on desktop, according to Statista. This dominance positions Google as a gatekeeper, wielding significant influence over which enterprises flourish and which falter. Brault contended that this level of control is problematic, advocating for antitrust regulations to foster a more competitive landscape.
Several key lessons emerge from Hardbacon’s downfall for entrepreneurs and businesses alike. First, diversification of marketing channels is paramount. Sole reliance on one marketing channel, such as SEO, is fraught with risk. Businesses should explore other avenues like social media, email marketing, and paid advertising to create a robust marketing strategy. Second, staying abreast of algorithm changes is crucial. Businesses must remain informed about search engine algorithm updates and be prepared to adapt accordingly, continuously updating and enhancing content to align with best practices. Additionally, building a resilient business model is essential. Ensuring that the business can withstand traffic fluctuations by considering multiple revenue streams and avoiding over-reliance on a single source can safeguard long-term viability. Finally, advocating for fair practices in the digital landscape is necessary. Engaging in discussions about the impact of search engine algorithms on businesses and pushing for transparency and fairness in algorithm development and implementation is vital.
Despite the hurdles, Brault remains hopeful about Hardbacon’s future. He disclosed that at least 20 credible buyers have shown interest in acquiring Hardbacon’s assets, indicating that while the company might not survive in its current form, its valuable resources could find a new lease on life under different ownership. As for Brault, his future steps remain uncertain, but he is steadfast in his commitment to the entrepreneurial journey. He acknowledged the invaluable lessons learned from Hardbacon’s experience, emphasizing the critical need for diversifying marketing acquisition channels in future ventures.
Ultimately, Hardbacon’s story underscores the volatile nature of the digital landscape and the necessity for adaptability. Entrepreneurs can glean valuable insights from Hardbacon’s experience, enabling them to build more resilient businesses capable of navigating the complexities of the digital age.
