Transparency Report #32 – The Month of Acquisitions (Four Products Changing Hands)

Welcome to the 32nd edition of our monthly transparency report (for September 2017). This series is about what’s been going on in the business and behind the curtains – our plans, strategies, challenges and learnings. Click here to see the previous reports.

1. We sold the Ad Blocker Notify plugin | 2. New plugins joining the family | 3. Is recurring revenue the way to go? | 4. Making sure your flagship product is rock solid | 5. On conferences and value

September was a busy month for us in terms of growing the business, shifting some things away, and overall re-focusing ourselves on long term planning and taking action accordingly. To that tune, we did two major things in September: we first sold one of our plugins, and then acquired three new ones.

As you can tell, this edition of the transparency report will be somewhat acquisition-heavy, but months like that don’t happen very often so I hope you’ll enjoy it. Plus, there’s more:

1. We sold the Ad Blocker Notify plugin

Ad Blocker Notify was a plugin particularly dear to us. Even though that might sound odd considering that we handed it over, but bear with me:

This plugin wasn’t our original creation. We acquired it ourselves around 2 years ago, and worked on it a lot, trying to make it even better than it was.

Even though we were excited about the project, we soon realized that it’s perhaps a bit out of the scope of things/niches that we usually take part in. I mean, don’t get me wrong, the advertising market itself is very interesting and has great potential, however, it’s also very complex and requires a lot of ongoing, day-to-day work to truly make a product like that awesome.

Basically, the ad market and thus the ad blocker market changes every single day. Advertisers try to come up with new kinds of ads constantly and also think hard on how to trick ad blockers into not flagging them. At the same time, ad blockers upgrade their algorithms in response to that. And the whole circle closes.

On top of all that, there are plugins like ours – plugins that need to identify correctly that there’s an active ad blocker in operation and then let the site owner display a message to the reader that in itself won’t be blocked.

What I’m getting at is that to have a plugin like that and make sure it’s of the highest quality, you need to be working on it all the time. We just don’t have the manpower to do that. But, Admiral does – the company that acquired Ad Blocker Notify.

They are one of the biggest players in this space and have been acquiring other similar plugins like crazy.

Handing over our plugin to them, in effect, allows us to focus on our remaining products better, while Admiral can continue building up their anti-adblock portfolio and potentially create a tool that’s really awesome.

That being said, that acquisition deal proved to be a bit difficult to handle. We didn’t work with a broker and decided to do everything on our own instead.

Personally, I’m totally against what you could call “old-school” negotiation or sales techniques, and prefer a more honest, transparent and to-the-point deals – which is what we go towards with all the products that we acquire ourselves.

I learned, however, that there are indeed some legal aspects of those deals that should be taken into consideration. Agreeing to take a look into those and carry through with the deal in this manner helped me get out of my comfort zone a bit and overall taught me a lot.

First, I learned how to better deal with different kinds of people and companies who might have a different vision and constraints vs a bootstrapped entrepreneur like myself.

Also, I learned that probably one of the reasons why those “old-school” approaches have been around for so long is that they simply do work in most situations.

To be perfectly honest with you, the sole fact of handing over a product of ours to another company takes me out of my comfort zone a lot. After all, we are giving everything away, including the control over the whole user experience to a third party, and we get no say as to what happens next. Nevertheless, it’s still a great opportunity for me and the whole team to get some valuable lessons out of it!

2. New plugins joining the family

Freeing up some headspace after selling Ad Blocker Notify, we could now take on a couple of new projects that are more in-tune with our current efforts in the realm of WordPress themes and also the overall direction that the WordPress market is headed towards.

Although this might come as a surprise to some, we’ve decided to invest in the Elementor ecosystem by acquiring three plugins that extend the default Elementor page builder and add a range of handy features:

Long story short, we believe in Elementor as a whole, its place in the market, and see a great opportunity in joining its rising community of users and developers.

As I might have mentioned before, the main idea behind all the deals that we do is pretty simple. Playing an active role in the WordPress space, we’re always on the lookout for new and interesting things being developed. You could call this research, but it’s actually more about simply being present and paying attention to the overall trends in WordPress.

So, with that, whenever we see something new and interesting coming up, we always think in terms if we can bring something unique to the picture in order to help the thing grow and reach more users. If the answer is yes then we try constructing a deal/contract. The rest is history.

(By the way, if there’s any product you think we should look into next, shoot me a line.)

When it comes to Elementor and things related, you have to agree that we’re right in the middle of the “page builders age” – as corny as this might sound.

This is happening! No matter if we, you, other developers like it or not. So we might as well play along…

Just take a look at these trends:

trends

It seems that “WordPress themes” reached their peak around early 2010, and the overall interest in them has only been decreasing since.

In the previous report, I talked about Gutenberg and page builders in general. While I still believe that Gutenberg will change a lot in terms of how regular users interact with their WordPress website content, in the meantime, we have to reach for other opportunities. Gutenberg is simply not there yet, and the recent legal setbacks might make things even more difficult.

With that, builders like Elementor, Beaver Builder, and Divi Builder are your best bet and the main thing to focus on right now.

One thing probably needs clarifying; we’re not planning on launching any builder of our own. We’re still a “WordPress themes” business. However, the existence and rising popularity of those page builders can’t be ignored. I believe that all theme developers need to look into and better understand the block-based site building process and what role we can all play in it.

In my opinion, it’s better to do this sooner than later because when Gutenberg comes and gets enabled by default, you really don’t want your theme to stop working, thus forcing the user to change to something else hastily.

For us, getting those Elementor plugins that have more than 30,000 users in total will accelerate our learning process a lot. And that’s what we’re ultimately here for – to learn and adapt.

I’m excited to see how all this plays out and what the WordPress themes market is going to look like in a year’s time due to those builders’ rise. Any ideas?

3. Is recurring revenue the way to go?

Another thing I talked about in the previous report were our auto renewals and the impact they’ve been having on our revenue. We have some more data on it this month:

As I’m looking at a batch of 300 subscriptions, I see a 55% renewal rate. I consider this a very good result! As far as I know, sites like ThemeForest have rates much lower than that, although, of course, I guess those numbers vary for each merchant.

While the revenue that this brings is still not huge (at the time of writing, renewals are 20% of our monthly income), I truly believe that we should still focus – and even more so – on trying to grow this number as much as possible. We’re constantly brainstorming about the various ways that we can make the memberships more valuable and thus convince more people to stay on.

4. Making sure your flagship product is rock solid

I’d consider Hestia being our flagship product right now. We spend the biggest chunk of our time on it and do whatever we can to keep improving it.

Last month, the focus with Hestia was on improving the user experience through Customizer, improving the codebase, improving the compatibility with mobile devices, and also working on how the theme cooperates with several popular plugins.

Hestia

About that last part. From my point of view, this is actually the BEST thing that you can invest in if you’re a theme developer. Making sure that your theme is not only compatible but actually works well and enhances the experience people get when using a certain plugin is how you stay relevant in the market and possibly grow in new directions.

I think that by utilizing a good, continuous integration/testing platform, a theme can reliably maintain compatibility with the top 50-100 plugins – I’m talking about plugins that require some visual styling on the theme’s part, so things like forms, e-commerce elements (nearly all WooCommerce extensions), LMS, review plugins, and so on.

Also, a good practice here would be to inform your users as to which version of a given plugin the theme is compatible and tested with (WooCommerce does this for its extensions).

Here’s why I think all this will pay off in the long run:

Basically, if your theme connects really well with all the plugins that a user might be using and provides nice visual consistency (landing pages + blogs + shop + forms, etc.), then it will be much harder for the user to change to a different theme.

In a scenario like that, it also makes a lot of sense to the user to keep the theme updated and to continue with their subscription so that they can receive those updates.

The days when you could just release a simple blogging or business theme every once in a while are long gone. This realm is gradually being taken over by page builders that come packed with hundreds of pre-made templates (which are more than enough if someone just wants a simple website).

Going forward, we plan on working even more on various plugin integrations and making sure that “someone’s favorite plugin” is fully supported. Imagine, if your user loves Plugin X, but your theme messes up the way that plugin displays something, do you think you’ll be able to keep that user?

For instance, we have a survey set up that asks a couple of questions whenever someone stops using our themes. One of those questions is about plugins and whether some incompatibility caused the user to look for another theme. Building a database like that is really valuable. After a while, you basically have a list of plugins that are crucial for your user base.

On another note; one more thing we’re doing for Hestia – to similar tune – is working on a collection of templates for popular page builders that can then be imported easily. This is another way of making sure that we’re on the page builders bandwagon instead of under it. Templates like that will probably reside in their own side-plugin and take into account the general style and look of the currently enabled theme.

5. On conferences and value

I attended the DNX conference in Lisbon lately. It is a conference meant for digital nomads and online entrepreneurs.

It was okay. I’m probably not the kind of guy to get overly excited about how amazing and life-changing something was. It was basically filled to the brim with motivational talks, and, to be honest, I did actually enjoy it.

DNX

Basically, the whole experience of being there reminded me that I don’t usually appreciate the freedom that I have and what this lifestyle allows me to do. It’s the freedom of working on whatever I wish, whenever I want to, and wherever I want to.

I tend not to remind myself about that often enough, maybe because I’ve just gotten used to it, or maybe because once you realize what you want to do and how you want to do it, the benefits seem not as attractive and you start seeing plenty of constraints that are still there … if that makes sense.

Anyway, looking at it from a different perspective and seeing lots of super-motivated people at the conference made me think about how we all go through different periods in our lives – some of them more challenging than others. We always seem to adapt to all situations and places, no matter how good or bad. But maybe that’s just me?

Okay, that’s all I have for you this month. As always, thanks for reading and for supporting us! Stay updated and get new reports delivered to you by subscribing here:

All edits and witty rewrites by Karol K.

Ionut Neagu

Love to travel, share and help others, I am working with WordPress at ThemeIsle.com. Passionated by Growth Hacking and the big things around me (trying to understand people, society, economy and our world ).
  • Ben Pines

    I could wish for no better partner and addon developer than the talented team of ThemeIsle. Can’t wait to see how you develop this further.