Alex Denning has helped some of the best-known product makers in both the WooCommerce and WordPress space market their products and services. We cover the opportunities and risks, the importance of partnerships and the challenges of pricing, and everything between.
Highlights of the chat with Alex
- The market for a WooCommerce product, straight-forward or evolving [01:30]
- The new categories of products don't necessarily exist with current paradigm [04:00]
- Who is the audience? What problems do they have? [06:08]
- New SaaS products and premium plugins and the risk [08:58]
- Marketing through partnerships [12:15]
- Marketplace and products at $2k+ [19:10]
- Usage based pricing [23:00]
- Users and the ability to step into the next level of price increases [29:15]
- Selling high end products in WordPress [33:55]
- Enterprise marketplace [36:20]
- A second glance at questions being asked about WordPress decentralization [39:25]
- The outcome of plugin companies being bought and changing hands [42:20]
- Notifications in the dashboard as part of the marketing [46:37]
- Good at looking at the short-term, but the medium term is needed [51:50]
Thanks to Our Pod Friends
I think we need to show people what the future is and show people what they'll be able to do. I just fundamentally feel like the 10 years of WooCommerce has let people build online stores. Sure, but we've come with like 1% complete. I feel like there's just so much more to do and over the next 20 years, things will though. I think we'll look back on how things are now and I think it's quite funny.
Hey, BobWP here and welcome to Do the Woo episode 169. This show is brought to you by Yoast.com with their big Black Friday sales coming Nov. 25. And also, Klaviyo, with their information packed 2021 Klaviyo Consumer Report. So let's join co-hosts Ronald Gijsel and and Jonathan Wold as they dive into marketing your WooCommerce products.
Ronald: I feel you don't really need an introduction. So shall we just jump in with a subject? Because today, the subject for me is all about marketing and its product marketing in the WooCommerce ecosystem or maybe in the wider WordPress. There's so much going on, but I think we always come down back to the three main questions and I'm going to just throw it in, throw the subject right in the middle. And then we just roll with it.
Jonathan: Let's do it.
The market for a WooCommerce product, straight-forward or evolving [01:30]
Ronald: So first up, the market. What is the market for a WooCommerce premium product? Is it really straightforward? Is it an evolving market or do we need to create our own market for anything that we create? Jonathan, I know these are really big questions. So just share your thought, just lay them bare, what's going on in your mind.
Jonathan: I think my first thought with the market is that it's growing right? We know that it's growing, we see a lot of growth in different ways. The question is where is it growing and what opportunities does it provide for plugin, for product creators. One of the parts of the market that I've been paying more attention to lately is the top end, like how much growth is there on the bigger stores for WooCommerce where presumably, and at least anecdotally people are spending a lot more money, they're more willing to spend money on products and services. And I'm really curious for Alex's thoughts because he takes in my experience more of a data driven and analysis approach to this. Anecdotally and drawing from my past experience, one of the things that I noticed having worked at Woo up until early this year, they're growing a significant customer success team, which I think is a really positive indicator about a trend that I've been seeing overall, which is larger and larger stores coming into the space.
And they're being more and more of a need for, they're like, "Hey, who do we talk to?" Obviously there's fantastic service providers. It was a really positive move for me and an indicator of market potential to see WooCommerce as business say, "We need to invest in customer success" and they've been hiring significantly in that direction, they've got some great folks there and anecdotally at least, I've been seen because of some of the key characteristics of Woo, the ownership, the size of the ecosystem, the flexibility, I've been seeing a lot more growth at high end where stores are coming in, even from other systems like Shopify plus and saying, "We need that ownership, we need the flexibility. Please give us the support" which is something that's been greatest to see Woo is responding to. So at least at a high level, given the overall trends of the past few years, I feel like there's a lot of growth in the Woo space in particular, on the higher end where at least where I've been paying attention to.
Ronald: And how higher end?
Jonathan: Stores that deal over a million a year. So, that's my sense. I'd love to hear Alex's thoughts.
The new categories of products don't necessarily exist with current paradigm [04:00]
Ronald: Yeah. Alex, is the WooCommerce market is that the number of installs or downloads of the actual plugin or is it, how would you classify them?
Alex: So, I guess I would look one level deeper. Well, I normally see in WordPress, that translates into Woo, is someone does a thing and then become the product category. Like Gravity Forms decide to sell a contact form and then contact forms becomes a product category. That translates very clearly into WooCommerce, where you see someone does a thing and in WooCommerce, as a community, we know how to build functionality driven product that cost a hundred dollars. And so, someone builds a bunch of those, they do well, other people compete with them and that's generally what the market looks like. If you're an individual WooCommerce product maker right now trying to make a new eCommerce product, you'd look for what those existing categories, what the opportunities that would give you a, like 5,000 people a month are looking for X, Y, Z.
That like paradigm is fine, but it can't handle new things. What we are starting to see with inquiries and clients' Ellipsis is totally different, much more SaaS like products and businesses exploring WooCommerce as an option and coming up with totally different approaches, like stuff with orders and fulfillment, all the tracking, like really complicated stuff that is integral to stores, maybe way more expensive, but also way more powerful. But those new categories of products don't necessarily exist with current paradigm hat on but I think if you can see the future a little bit, we don't know how big the market could be because the high end is so high.
Who is the audience? What problems do they have? [06:08]
Ronald: That's a really good way of separating the, you know on one hand, Jonathan is looking at store and store value. Alex, on the product categories and almost fitting into boxes, but then there's this one box that's not quite filled in yet and it's difficult to understand where the boundaries are with these, especially with SaaS. Jonathan, I know you agree on the SaaS and people because I've seen you nodding. So, I know you've got some further thoughts on that.
Jonathan: Yeah. One of the things that I find, I love that Alex brought up paradigms, like how you think about it. It's kind of basic yet essential in my experience to just focus first on, "Okay, who's the audience and what problems are we solving for them?" Right. And in this case, if you take the high end, for instance, these stores that do above a million a year. I don't know how many there are, let's just say for argument's sake and I feel like quite conservatively, there are more than 5,000 that do that. And this question of what problems do they have and what value can you create for them, one of the things that I loved about Alex's work over the years like doing the Black Friday analysis is, I've had this sense, there's a lot of just copying each other in the space and that's not a good idea.
It's fine enough. Yet, it's often a missed opportunity. And if you just take a step back, I remember some of the conversations that I've had with folks trying to come into the Woo space, so big store over on Shopify, they're coming in and they're like, "Wait a minute, the subscriptions product, which will be the foundation for my business, is only 200 bucks a year?" And these are a million dollar businesses. That's almost like disconcerting to them. It was like, "Wait a minute, that's it?" And then, of course that once I explain to them like how it works, "Okay, well, that's great" yet there's this question mark about it, which suggests this misalignment with value. Right?
So for me it's like when you're looking at the space in the market and say, "Okay, who is the audience? What problems do they have?" And if you start to look, just take that high end example, then you could see how a hundred dollars a year plugin is kind of grossly misaligned with value for that audience and likely to be a disincentive for them where they're like, "This is key functionality." We're not going to pay a hundred dollars a year, even though it might be perfect for them, right? It might be exactly what they need, but you're creating the disincentive by misaligning on value. That's something I feel pretty strongly about.
New SaaS products and premium plugins and the risk [08:58]
Ronald: Yeah. Is there a case that we are, as an industry, we have that, also as a responsibility, that we create value, that we add value to WooCommerce but are we then in danger that we might create a boundary with the startups, the new entrepreneurs that want to step up and maybe have to make use of the free plugins, the $29 plugins or whatever.
Jonathan: I don't think that's a concern. Also it's worth pointing out that there's different approaches you can take, if there's not a SaaS component to it, because that's a whole other story, right? I've seen people who have had high end premium plugins. There's not a whole lot of them, but there's a few. And if someone can't afford it, like as long as the support's not a thing, they would just give it to them. Right? I don't think there's a risk. And also there's always room for someone to undercut and make a new one. Right? But the question, like there's always space for that if there's really that much price sensitivity. But I think overall, I see a trend of us neglecting value alignment for the higher end stores.
Ronald: Good point. Alex, if somebody comes to you with a new product, something that's maybe not out there, maybe have an example in mind and you want to market that to the audience, whether this is a high end or a low end, how difficult or maybe really easy is it to connect with this market? Because it's such a niche thing that I'm pretty sure that if you throw Google Ads at it, you're not really going to connect with the right people.
Alex: And often people come to us because they spent have much on Google Ads and it hasn't done the thing. So if you act like a WooCommerce product and you're in an existing product category, then it becomes fairly straightforward for people to understand. This is a product for search on WooCommerce stores and I know what that is, but I know what to expect, I know what to expect in terms of pricing, in terms of support, in terms of quality. And then you provide some signals that the quality is good, et cetera. If you're an existing category, then the classic marketing channel approach of like, do these four things at these points, is absolutely fine. And we work with clients who have broken in or are breaking into new products categories with innovations on, what the competition does... That's fine and that's good.
If you got something that does something different in WordPress, we're not really set up to understand that right now, you need a vastly different approach if you're genuinely doing something different and it tends to be a lot of education, it's a potent mix of hype and education to show people what the future could be and also show them how your solution solves it. But that is more tricky and riskier but with higher upside.
Marketing through partnerships [12:15]
Jonathan: I've got a couple of thoughts on that. So this is one of the general challenges we face in our ecosystem being as decentralized as we are, right? It's like, you have to leverage existing channels, right? And if you have something that's, for instance, at a much higher price point or like Alex is saying, it fits outside of those, it's like, how do you go to market with it? Right? Ads aren't the best approach. My hypothesis is that the best way to do that in this ecosystem, today at least, is through partnerships. You have to find the companies that are already serving your audience and figure out ways to work with them. Couple examples, with WooCommerce, if you want to do a high end product, one of your best approaches is to work with hosting companies that serve the high end in WooCommerce, right?
And figure out an angle to provide mutual value for them. You might also look at how could I work with WooCommerce directly, like form a partnership with them, knowing that they have a customer success team, right? That's like, if you can solve a clear problem, because it's hard, at least in my experience so far, if you're starting from zero to have access to those audiences, that we don't have a centralized App Store, it's hard to get them at the right point. So, you have to find the folks who are already serving that audience that you're after and figure out ways to work with them. And that's what I'm seeing both working today and I think we're going to see a lot more of that in the future.
Ronald: I think partnerships are very, very powerful. My own experience is that, on paper, the first couple of conversations that go really well, very much aligned, you're talking to an audience where you both can benefit from this partnership, often then when it comes to technical integration to make it work and to make it truly awesome, that's where things go slightly not right. To put it in a real polite way, developers, teams have a certain vision and roadmap. And then for partnership managers to start talking to, it's just, "Oh, wouldn't it be amazing if we could do this, could do that." It's like, "Yeah, great. Let's do it. Let's see if it's viable." Oh no, it's not. It's not quite there yet.
And then just weeks and months go past and it's then a lost opportunity because also as a user putting my users hat on, I really want to know if, and I'm just using my own example, let's say a particular functionality in WooCommerce is compatible with a currency switcher because early on in the stage of creating my project, I want to know if that and that and that down the line is going to cause a problem and if that's not advertised and tested thoroughly, but then you add a third plugin into the mix that just throws up anything unpleasant, also gives quite a bad name of what we are trying to achieve. So my wish was that there is a bit more alignment, a bit more framework around it. Jonathan, I hope you don't mind me sharing, but I know you're really passionate about that and you're working towards that. So, I hope this time next year, it's going to be a lot more straightforward on that.
Jonathan: I think that compatibility piece is a pretty big, it's a pretty big challenge. And right now there's a lot of opportunity in just the curation side of things, whether you're a hosting company or a service provider to say like, "Hey, these are the pieces that work together because we don't have standardized frameworks." It's very one off and it requires folks to do, now, at YITH you're in a better place for example, because you have more of like a marketplace where you can do some of that broader work.
If you take the ecosystem as a whole though, it's a big question mark and in general, there's not much aligned incentive to solve the problem, right? Developers will listen to their customers, but it tends to be very one off like which plugins are we hearing the most from? And then the affect is a situation where customers are left, like how do we know? How do we know what's working? And it's great that we can own all this and it's great that we have all the flexibility we need. Yet, this isn't working with this and what do I do? It's a challenge and it's a lot of opportunity for the product folks in the space.
Ronald: Post Status is doing really well, connecting people, connecting companies and having these conversations and channels where you can find each other and say, "You've had a few customers, mentioning we'd like to collaborate and things are happening." So that's a really positive thing.
Jonathan: Right now, it's all very manual, which is perfectly appropriate and probably going to be mostly the case for the next few years, if I'm being more realistic about what I'd love to see happen. Yet, it means that there's a lot of opportunity in the space for people who are wanting to put in the work to innovate, to find ways to create more value for the customers that they want to serve.
Ronald: Yeah. Alex, do you have any more thoughts on partnerships?
Alex: So, I see that as a problem of infinite opportunity and scarce resources, and right now, remarkably, small teams build WordPress and WooCommerce products and they have enough resources. There's a future in which, that changes. Just going back a second though, to servicing new products and bringing new things to market, and when you talk about the WooCommerce marketplace in that context, I see that as a really key piece of the ecosystem, essential for the success of the platform in the medium and long term, so that people have a source to buy and find trusted extensions.
And there are a hundred different versions of what that looks like, but certainly like Ads on search, whatever, on the marketplace, things like that feel interesting to get more people building WooCommerce stuff, because then when they come to me, the answer isn't, we're going to need a year and this is what we need to do, we can buy your first customers. And this is a much more sensible decision to build things on Woo and hundreds of versions of what that looks like. But I do see the marketplace getting out right, is completely essential for platform success.
Marketplace and products at $2k+ [19:10]
Ronald: They've done a lot of work on the marketplace and accepting more and more plugins while trying to keep the standards high. I know they have had their challenges and I think they still exist. I'm now speaking as the feedback I got from my wife who tried to put two plugins together and it just didn't work. And okay, the refund was very quick, easy, straightforward, but at the end, she left as a frustrated customer and then looking at other ideas and looking outside of the marketplace and from all scales of the WooCommerce user, it is a frustrating thing before you then start to look at developing your own. If I may move to the next big topic, which comes down to pricing and pricing a premium product, Jonathan you touched on it a little bit already, a hundred dollars for a store that has a turnover of a million, seems unfair but somebody that just starting out and needs a range of plugins or services in a hundred dollars is quite a lot.
How can we protect the product developer to have enough incentive, to keep innovating, but also have make it accessible enough that all users can use it? But on the other hand, you have the top end, that also needs to get the good value. What? It's difficult. Isn't it?
Jonathan: Well, I'll throw an initial thought in here and I'm really curious to hear what Alex thinks, what I'd like to see, given my sense, and I could be wrong, but I think I'm right about this. What I'd like to see is, WooCommerce focus products in the $200 a month range, all the way up to like $2000 a month with the high end being more of a service component to it. So it's like the low end, it's like 200 bucks a month and it's solving a key problem for this. Let's call them the top 5,000 sites in WooCommerce where it's like, you don't have to have more than a couple hundred of those to have a pretty decent business if you're a smaller provider. Right? And there's a lot of opportunity to then grow from there and you could go down market if you wanted to expand, like having a lighter version or smaller version.
That's what I offer. I think where there's a lot of opportunity as an anchor is to think, what could you do? And for me, the basic formula is, if I wanted to have a $200 a month product, which is interesting for a number of reasons, whether it's SaaS or not, how can I create something that provides at least 10x value to my customer? And that to me is why I feel like there's golden opportunity here because for these stores doing above a million a year in revenue, and there's some pretty crazy ones out there. There's no question mark about their ability to pay for it. It's just, does it create value for them?
Alex: I think that we just need to start doing things slightly differently. And the trouble is that the first people to do that might not be rewarded for doing that and thus, no one wants to do it. When we can see that the $2,000 a month plugin works, people will see that as an opportunity and go for it. But you essentially need to run the product and the service component or something like that, you need agencies to start looking seriously at this kind of thing. And when they can build huge hours on the one customer with a normal workload then you can't stand when people do that.
Jonathan: There's not much incentive. Yeah.
Usage based pricing [23:00]
Alex: But we need to start doing things slightly differently. Like Ronald, to tell how you do all those things that you were describing, the answer is, some sort of usage based pricing, but that requires much more of a service component. That is how you can capture revenue scaling with store revenue whilst also making it cheaper for people who are starting those journeys.
Ronald: Mail marketing platforms do it, for example, hosting platforms do it based on usage.
Alex: Yeah. And anything like anything API based that becomes much more doable, but that's going to require the industry to shift away from annual plans, training customers to completely rethink what those look like. Well, this isn't WooCommerce but I found it really interesting that Rank Math came out with a new content AI thing last week. And they're using tokens for it, like you get this many in tokens. I think this may be wrong. And this may have changed by the time this comes out. As I understood it, they were going to sell them on a monthly basis going forwards, but they hadn't done that yet. They'd just given people a bunch to test.
And people really didn't understand that they were like one off tokens and they wouldn't be coming back. Like I was reading their Facebook page, it was just full of like, So I get these ones each year? Are they free? The idea that it was more SaaS like, was just really, really confusing to people. I think they did a perfectly fine job of explaining it to people, but it was just their customers.
Jonathan: And to the point that you made at the beginning, Alex, there's this degree to which you have to keep going. And like it's the early ones don't tend to be as obviously rewarded. Right? Because if you didn't have a bigger picture of you, you could just see all the negative reaction or presumably, not necessarily negative, but confusion. And it's like, "Oh, maybe we screwed up and we need to reverse" Like that's a good example if I'm hearing you right, of a usage based model, that you could scale to value.
Alex: The WooCommerce marketplace can't handle products with monthly revenue right now.
Jonathan: No, not right now. No.
Alex: And I'm sure that will come in time, but there are loads of problems to solve here. And I feel like we've barely scratched the surface.
Jonathan: It is to the point that you made, like there is the degree to which we need to see people do it first. We have a few examples. One that I like a lot is what Till has done with Object Cache Pro, right? He's got this plugin that sees most of its growth on the WooCommerce side and it is in that a hundred dollars a month territory. I've suggested he increases it. And he's got that $2,000 month high end and he's selling it but it took him not caring about the market and saying, "There's value here. I'm going to do it this way." And it's taken some time, but now it's built to a point where he's got a full business that he's able to grow.
Ronald: That's a really good example Jonathan, because brave people like that who don't really care.
Jonathan: Yeah. So you don't know if it's going to work or not. And when he showed me, it's like, "Wow, this is really working." Customers are happy. They don't care about the price, most of them anyway. He always gets questions, but overall the customers that he wants to serve, which is that high end, they're happy to do it all day long. We need more like that.
Ronald: Yeah. And he will drag the industry with him if he sticks to it and the success is shared with everybody else. It will add value to everybody and it's also great that there are options for newcomers, if you are a new store and there are, yeah.
Jonathan: Exactly. And in his case, he has the free version, which is super popular, right? There's different approaches. I want a situation where, I think I'm right, that there's a lot of opportunity in that $200 to $2,000 a month space. At some point though and to Alex's point, it might be more on like just the agency side. I think there's even more opportunity than that. For businesses that are doing even higher revenue, there's a lot of opportunity in this space and we need more people willing to try.
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Now let’s head back to the show.
Users and the ability to step into the next level of price increases [29:15]
Ronald: I've got just a thought. I remember this myself speaking with customers who own stores and they see plugins, they see it priced at and then to educate in that instead of spending, let's say a thousand pound or dollars a year on service and plugins, they now need to spend 20,000, which we all know, we can argue that if you had to rent a brick and mortar store, this is still by far nothing, 20,000 is probably even little with the examples that Johnson just shared.
Do you think that the store owner, and then maybe the middle to large ones are educated enough that it'll make the job of developers easier to step onto this next level of increased pricing? I'm not quite sure if I'm framing it right here, but I think, on one hand, we talking to the developer, to the implementer, to the agency and on the other hand, we have the customer who is savvy enough to understand, because they know, well, how much Shopify costs. They've done their research. They've looked on WooCommerce and they know, it just need somebody to put it together. But then you have the person in the middle having to defend, well, actually with your store sales, you now have to start paying $200 or even $2,000 per month.
Alex: I feel like there's a load of missing pieces here. And whenever you talk to Jonathan for 10 minutes, you think about all the things we don't know and what those could be. Yeah. I mean, so simultaneously people are used to paying small amounts of products and huge amounts of products in and out of Woo. Do we need to educate people? I think we need to show people what the future is and show people what they'll be able to do. I just fundamentally feel like the 10 years of WooCommerce has let people build online stores. Sure, but we've come with like 1% complete. I feel like there's just so much more to do and over the next 20 years, things will though. I think we'll look back on how things are now and I think it's quite funny.
Jonathan: I think the next key opportunity in this space is just how do we better align with business value. To take the examples I was sharing earlier, it's like these businesses and Alex mentioned it, they're used to, at the high end, they're used to paying a lot of money in like the Shopify ecosystem, for instance. There's lots of, they have the SaaS APIs, so you can have the monthly usage billing and all that. And so, on the one hand, we don't want to lose some of that attraction of the lower total cost of ownership that you get in WordPress. On the other hand, we get too scared about it sometimes. It's like we've gone from, as Alex was describing people, building stores on Woo to the way that I think of it now, it's like entire businesses.
I have a good friend who went from selling a couple hundred bucks a year to multimillion dollar business. That's all on Woo. He's in manufacturing and doing all this stuff. And taking that subscription business example, you have a multimillion dollar a year subscription business on Woo, there's a disconnect when you're only paying a couple hundred bucks for the core functionality that powers it, right? Because something can go wrong. So I think as we see more and more of these businesses being built, where they care about ownership, they need the flexibility, they want to be a part of this ecosystem, the opportunity is to say, "How do we better align with value" and give choice. I think the thing that we can do really well in our space is to not try and force people to, it's like, "Oh, you can only get this product at the highest end."
It's like, no, give them the opportunity where they see that value alignment, add in the service component or whatever it is, it's higher support. Give them the opportunity to align with the value to their business. That's the thing I see is missing right now where we feel like to the points that Alex has made there's a lot of just copying, right? Or it's like, "Oh, I can't do that." It's like, no, like this is worth a lot to them, align with it and then reinvest accordingly, like make it better.
Ronald: Choice, is a really good word. I think that's the power we can give to store owners is choice. You can choose whatever you want and swap it and change it and upgrade it.
Selling high end products in WordPress [33:55]
Jonathan: And let's create more choices for the high end is the overall thing I would say, because right now there's not a lot of choices. And it's an underserved market that I think gives a lot of growth opportunity for product creators in this space to have more resources, to innovate and create better things.
Alex: But whilst I agree with everything as always, I don't think we know how to sell those in WordPress.
Jonathan: That's fair. Yeah.
Alex: If you look at the evolution of enterprise services on WordPress, you had .com VIP, Automattic bought a bunch of agencies in like 2012, 2013, 2014. Now you have things like Human Made is like genuine healthy competition there, but effectively, Automattic got that category started. There was an obvious opportunity.
Jonathan: The high end. Yeah.
Alex: Right. I see the same thing here and maybe we just need that door to be held open for everyone properly by WooCommerce directly or maybe through VIP. I don't know.
Jonathan: Well, to your point there, I think one of the specific opportunities, there's a few that are starting to do this. Alex, you introduced me to Tom at Convesio. There, I think we need to see more, one of the opportunities is for the hosting side of things to have higher and higher end offerings. And within the context of those higher end offerings to what we talked about earlier, that's where the partnership opportunities contend, to be for products wanting to serve that category. So, I think that's a good starting point because it's as Ronald mentioned tied to usage, right? So it's like, if you could identify the hosts out there, VIP being a good example, because they have a pretty mature technology partnership program. I just don't know how much they're doing with Woo yet, where it's like identify those serving the high end and find ways to align with value for that audience and the quite immature space, At least from my perspective right now is like WooCommerce hosting on the high end. We're starting to see some innovation there. They're starting to be growth. Yet, it's still pretty immature.
Enterprise marketplace [36:20]
Ronald: Things are changing though. Isn't it? In the ecosystem. I don't know, if you want to talk about the latest acquisition of GoDaddy, but they seem pretty strong with their message in the blog post, but I must say we also noticed that high end demand and we are working on the idea of this elite package or not even a package, but the offerings. Yeah. And have a totally different relationship with these agencies rather than here's a plugin download, install, offer support, but that's as far as it goes. So I think that the market, it's brewing, but it just needs a bit more time.
Alex: But even in, even in regular WordPress where the enterprise offering is more mature, the low end is still, you could just do that and have really significant business.
And it's not the case that everyone needs to start working out what their enterprise subscription offering was like, there's certainly space for both categories. And I think one of the things we don't know is, to what extent, shift to eCommerce in general works. If someone starts an online store, like, is it the case that they get their first sale and then their 100th sale and they grow and they spend more, as that goes on, like does that actually work in practice or do people get their first sale and then the 10th sale and then no more sales?
Jonathan: Yeah. I'm glad you brought that up, Alex. I tend to be pretty focused on the high end and the enterprise. Yet, you can build excellent, very profitable, sustainable businesses serving this very large ecosystem. And I see the gap on the high end, yet, there's also question marks about, okay, what does it look like to one of the things I loved about that I've seen with Woo is that it's growing outside of WordPress. There are people who are hearing about WooCommerce that haven't heard about WordPress. And so, which is good when we think about the ecosystem as a whole, like more coming in, but there's these question marks about, well, how do you serve that audience effective? We also, for that lower end, we shouldn't assume we shouldn't just look at what everyone else is doing. That's the easier thing. And it's fine, but yeah.
Ronald: Jonathan, sorry, this is quite interesting because I always, Robert Jacobi, co-host on the Woo Roundtable, he always jokes with me because one of my question is like, what point does WordPress increase because of WooCommerce or I'm assuming WooCommerce is driven by WordPress, but there comes a point when then this is tipping. And I think in terms of hosting and product development, I think it's WooCommerce taking the lead now because we see that there is a willingness to spend more. So these little signals and now you've brought it up. Ooh, I'm going to have to ask the question again to him soon.
Questions being asked about WordPress decentralization [39:25]
Jonathan: It's hard to know because we all have our own confirmation biases, the things that we see, right? We see a lot of a certain thing where like there's more of this and this is the general challenge that I see across this space, is that for better, for worse, people get locked into like, this is what I'm seeing. It's like, well, it's also what you're looking for. And WordPress for most of us is just a lot bigger than we realize, right? Like there's entire product categories and verticals out there that people haven't even heard of. I remember doing research a few years ago into discovered that like enterprise resource management was a category in WordPress. And I was like, "What is this?" And there's just these categories that we're not aware of.
So in general, if I only said one thing, it's like, "I want to see people just be a lot more curious and thinking outside of what they see in front of them asking more questions because WordPress is so decentralized" Where do you learn this? Right? It's able to evolve in pockets and a lot of our focus will tend to be on just English. There are really fast growing markets outside of English. And that are very underserved. And I think the commerce side of it is, to me at least, it feels like a key ingredient, but I don't know what I don't know. Right? Observationally, it's a key ingredient to, I think a lot of additional growth and WordPress.
Ronald: Yeah. Alex, did you want to add anything? Otherwise I'm going to jump over to the next fun topic.
Alex: Yeah. Just on that. There's an interview with Matt Mullenweg, it was on a protocol like a technology news, in which Matt isn't over something. Matt talked about potential for funding within different segments of Automattic to be separated. There was no more detail than that. But what I read from that was, we could see WooCommerce financially do something different from the rest of Automattic, which intrigued me a lot, that opens up all sorts of options or letting Automattic invest more in WooCommerce, as is needed. I don't know if more is possible sensible from, I don't know, what's currently going. That was the first time I'd seen that letter. That was very interesting and the suggestion was that you would do that because of differing growth within different product businesses within Automattic, WooCommerce growing faster.
Jonathan: I'm struggling with whether I can comment on that.
Ronald: No, I was going to say, "I'm not going to pass Jonathan in case he's breaching his contract" but shall we just leave it to that and then let everybody else speculate.
Jonathan: I'll just say this, Alex. I think you're onto something.
The outcome of plugin companies being bought and changing hands [42:20]
Ronald: Very interesting thought, Alex. Maybe we should have started the episode. I'm going to just jump to the last subject. And it's a question which, especially this time of year, is questioned by a lot of product teams. What are the boundaries of what a WordPress ecosystem tolerates when it comes to marketing an offer, a product around Black Friday. And I'm not going to mention the big pink elephant here, but I think we all know who we're talking about. So for example, in the past, we've had companies which have been, plugin companies that are offer a really good service, been bought up a lot of users and then suddenly a month down the line is sort of changing their business and offering a premium model, everybody has to upgrade that didn't go down very well. Alex, do you have any examples of you think, "Oh, you can go that far, but that's really going too far."
Alex: Look, We all love a good WPTavern article and a good bit of outrage. With no marketplace for WooCommerce where everyone sells on. I like most products. So most products are on the marketplace. There's no like central authority for deciding what you can and can't do, its up to the individual product makers and individual product makers will come to very different conclusions about what they think they can get away with and what they think is acceptable. We work with plenty of clients who have an email list, but people have opted in to receive marketing messages and they do not want to bother people with their marketing messages. And it comes to Black Friday and they will tell us that they don't want to send emails because they find it annoying when they get emails. And I'm like, "This is a marketing email. If you're not going to use it now, then let's just delete it."
And sometimes we do delete it and those are decisions we want to make and that's fine. And that's how they want to run their business. Other companies will be more aggressive and that is their prerogative. Are they morally wrong? I'm not going there. For what it's worth, I do think that, like what Yoast did last year was fine and in terms of like who receives criticism, it is wildly inconsistent, like with what gets like named and shamed and what people get away with and Yoast in general, I do think specifically a very considerate and thoughtful on what the impact of these things are. And I thought last year was fine. People are going to do that thing again this year and Yoast probably weren't because people got upset last year, but someone else will. And that will happen until the end of time.
Jonathan: I'll offer a piece of unsolicited advice for anyone listening, and the Tavern, yeah, it can be a lot of fun. Yet, I think it's, in general, a mistake to give it too much attention because it's a small set of vocal voices, right? That don't, for many, represent their customer base. Now sometimes it does. And there's a great alignment, but I think that's the assumption question. It's like, I've seen a few situations where folks have like, I feel overreacted to the negative feedback where it could be just the sense of what's normal or what's acceptable in this space, even though that's going to change and like he said, it's not consistent, right? Like one player is going to get a lot more criticism. In general, whatever the jet pack team does is going to get more criticism, right? At least within like the Tavern crowd.
So from my point of view, it's like, you got to take it with a grain of salt and ask yourself, am I serving? And is this meeting their needs regardless of what I'm hearing from the Taverns' audiences. Easier said than done, I know because like it can be quite the thing when you're getting pressure from like, "Hey, this is here, we got to do something with it." But step back and say, "Am I doing right by my customers?" Now to Alex's point, I think I got my first Black Friday promo email, like two weeks ago from a WordPress plugin and I was like, “Guys, a month ahead?"
Ronald: That's for next year. That's for 2022.
Jonathan: But it's interesting. It's interesting because there aren't like clear standards.
Notifications in the dashboard as part of the marketing [46:37]
Ronald: Yeah, well it is, whoever can show the loudest, of course. There was a talk every year, probably it's like, "Oh, should we allocate a piece in the dashboard where people can market their premium service and you can opt in or out to receive that. Is there any power behind that? Is that still a topic or is that always post Black Friday and then it leads to nothing?
Jonathan: What do you think Alex?
Alex: So notifications not being great in WordPress and people being able to plaster big messages means they will Plaster big messages and yeah, sure, every six months I see a screenshot of a site that someone's locked into and it is just a terrible time and a terrible user experience, not as bad, but what if you can do it? People will though. On the repository, there can be standards about what you can and can't do, but WordPress is open source and people selling even premium ones directly on their own sites, can and will do whatever they want. And it doesn't feel like the core issue to focus on. A lot of what I see is that one simultaneously with people not wanting to annoy customers and the vast majority store of product owners are very thoughtful about what their offer should be and how they should present it to people.
But there's a lot of FOMO going on with, on the product side, with what they should and shouldn't do because you see like, so and so did so and so much revenue. And in one week they did more revenue and the rest of the year and these kind of fanciful stories drive a lot of FOMO. And so people see social pressure to copy one another and in a space where copying each other is very easy and very popular. Yeah, you draw a straight line to how it gets out of hand, should WordPress like try and solve that probably, yeah, but it's not top of the list.
Jonathan: And the challenge, let's take notifications for example, it's like this question of aligned incentives, right? Cause there's been some good projects working on it. In general, one of the things that surprised me about working at Woo, was how much friendlier the Woo ecosystem is to business.
I'm oversimplifying. Whereas WordPress, we tend to have this like not an aversion to it because we recognize, but there's just, I don't know, there's just this a fairly vocal minority of folks who seem to be anti-business and not then it's quick to find examples of things that get out of hand. Right? But there's this overall, I think we're more concerned then is healthy in our relationship with the WordPress ecosystem as a whole about what this looks like and WooCommerce, because I came into it being quite sensitive and realizing that, "Oh wow, a lot of these store owners, this is not a big deal to them. They make money, they don't mind paying for things and let's just figure out ways to make their life more straightforward." So, I'm curious to see how this stuff evolves. Notifications being a good example, because I would expect that if core had a way of doing it, it's going to be probably one of the more quote, unquote anti-business approaches.
Ronald: Yeah. And if it's linked to community contributions and those things, because, a lot of the marketing is linked to the two sponsorship and contribution to core, it's a delicate balance. And I must say also we, as a company, we find it really difficult to abide by what are acceptable rules. After all we support 50 team members and of course you want to do well and make it a better event than last year, it is incredibly difficult. So I think I'd like to see some guidelines of what accept acceptable or not because of also what happened to ourselves two years ago. We've toned it down a little bit, but nevertheless.
Jonathan: I'll offer my advice on this, is that for now, I think your best path, in general, is still this idea of working with partnerships, right? Because if it's like you work with a hosting company for instance, who has the customers and you come out with work out a deal with them, then you're effectively circumventing this. It's like, all right, you can take it on a per case basis and say with this partner, we're going to do this type of deal. We're not worried about like, we're just serving them. We're not worried about the ecosystem as a whole. It's a circumventing of the bigger problem, but practically speaking, it's I think one of the clearest paths right now.
Ronald: Yeah. I like that. I think it's maybe a good topic to end this conversation on, because I think partnerships is such a massive topic, also for 2022 and maybe it's something we can revisit early next year and maybe look at some opportunities and some ideas of what plugin developers, but also hosting and SaaS products can work on and collaborate on. So maybe just some final thoughts, Alex, anything you'd like to share?
Good at looking at the short-term, but the medium term is needed [51:50]
Alex: I'm starting to think about themes for next year and in WooCommerce, the thing that most interests me is figuring out what the medium term looks like. I think we're very good at looking at the short term because that's what drives sales tomorrow. But I want to know more about how people are going to use stores and how people are currently using them and how it's going to change and what they need. I don't know a lot about that stuff and I think as a community, we also don't know a lot about that stuff. That's my area to think about.
Jonathan: Oh, like that idea of focusing on the medium term, I tend to get overly focused on the long term at times where it's just like, All right, what does this look like? The medium term is probably where the most money is to be made, the next bit. Just taking my favorite threat of partnerships, I think encouraging people to just ask, for those listening, to ask the question of like, all right, who is my audience? What problems do they have? Partnerships is all about how you connect with that audience, right? So it's like, if you want to serve the high end, a partnership with a hosting provider that serves the low end is not going to get you there. So I think the opportunity in this space is to say, "Okay, who are the folks that are serving? It could be another product company. It could be ed Alex mentioned education." Right?
If you can find the folks that are educating the customer base that you want to serve, that can lead to opportunities, but it starts with just being really clear on who do you want to serve and where I would challenge people in general is don't make assumptions about who that is because a lot of folks might just say, "Oh, I'm going to serve the average WooCommerce" Well, what does that mean? What verticals do you want to focus on? What size, what problem sets do they have? And there's not a right or wrong. I have expressed my bias towards the high end because it feels under served. Just being clear though and then saying, "Okay, what type?"
Ronald: And we need that high end as well. To serve the medium.
Jonathan: We do. Yes. So it's an important one. Yet, it's you as a product owner asking who am I here to serve? How can I connect with them and be creative about that? Don't make assumptions because there's going to be innovative that we haven't expected yet, especially I expect to see more like outside of our ecosystem where, maybe there's someone who serves a particular vertical, that's pretty untouched yet with Woo and WordPress, and would respond really well to this message of ownership and flexibility in this broader ecosystem, yet needs to be served in their way and using their language, no pun intended, but perhaps so and I think if you start with that, just being really clear on who that is, don't make assumptions, a lot of opportunities are going to open up.
Ronald: Yeah. I think those were a great thoughts. I also want to add that the Woo is now also part of the post data network to really good platforms to stay, tuned in, because a lot about, what I'm talking about is the bigger, bigger vision of the future and what we are working on, what we can improve on and conversations like this are just really useful for me. And hopefully to lots of other people. If they want to ask you a personal question, Jonathan, what's the like connect with you?
Jonathan: If someone wants to connect, Twitter is great, Sir Jonathan on Twitter, or hit me up in the post status Slack.
Ronald: Yeah. Alex, for you to connect with you.
Alex: I'm at Alex Denning on Twitter. Yeah, I'm on Slacks, Post Status, Do the Woo, WordPress.
Ronald: Well, thank you both very much for joining and see you next time.
BobWP: Hey everyone, thanks again for tuning in to today's show. I would like to give one more shoutout to our two Pod friends. Don't miss 30% off everything at Yoast.com starting Nov. 25. And make sure and get access to the 2021 Klaviyo Consumer Report. You will find the link on dothewoo.io/friends/Klaviyo.
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