Transparency Report #48 – The Last One

transparency report 48

Welcome to the 48th edition of the monthly transparency report (for January 2019). This series is all about the inner workings of this business – our plans, strategies, next steps, things good and bad. Click here to see the previous reports.

At first sight, the number 48 might not seem like any significant milestone. However, it’s actually been four whole years since I wrote the very first of these reports! It’s time to look back at what has happened since then and the things we can learn for the future:

👻 Ghosts of reports past, present, and yet to come

I started this series as an attempt to share our journey through the early stages of growing the WordPress theme business and other related projects – including this blog. I knew I had something to share after three years of struggling as a freelancer on various gig sites, to then finally transition to the theme business and find out that it’s possible to more than 3x your revenues.

I wanted to share all these experiences since I figured there’s probably a lot of people out there who could benefit from such insights. After all, I wasn’t the only person going from freelancer to WordPress theme business, so there are likely other people struggling with much of the same challenges.

It’s been a rough ride for sure. While the early stages were nothing but growth – which you can clearly see when looking at the numbers from the initial reports – there were some tougher periods as well. Most notably the time when we lost roughly 50% of our revenue. Just to show you the overall impact of all these ups and downs, here’s where we are today:

stats

Yes, you’re reading this right. Currently, we’re generating roughly the same earnings as we did in April-May of 2016.

As for the transparency reports themselves, at one point, I decided not to share revenues anymore. (I did this before the drops.) I didn’t think sharing the numbers brought value to the reader since I wasn’t sharing any other background info or analysis as to what was causing the fluctuations.

The reports also served a two-fold or even three-fold purpose for me. Apart from being a way to share my thoughts, ideas, and lessons that other entrepreneurs can use, I also treated it as a personal journal of sorts where I can somewhat “record” my state of mind at a given phase that the business was going through.

Lastly, the reports were a way for the team to see into my mind, so to speak, and learn what was likely to happen next. That is not a perfect thing, I know, but lots of times the team didn’t really know what I was up to. Since I worked on my own, the reports were often their primary way of finding out.

Luckily, I’ve managed to change that, which has had a positive impact on the company and our overall work culture. But the changes weren’t only my internal, the market space changed as well, the scale of our business changed, and the ecosystem we were in changed (the network, partners).

As a result of all this, what I’m realizing is that many of the things I’m sharing in these reports, even if I’m giving you a whole first-person perspective with no details omitted, might not work for you. That’s especially valid when it comes to discussing marketing – since what we’re doing is highly tailor-optimized for our business and the stage it’s at right now. And I do know that marketing is the no.1 thing you want to hear about (I did a poll a while back on Twitter).

For instance, I really don’t feel that my actual, 100% honest account on what we did to promote three of our recent products would help you if you applied it. Let me show you what I mean. So here are our results:

  • Optimole (our new image optimization service) – 10,000 active users in three months and quite a bit of them paid
  • Domain Wheel – ranks top 3 for “domain name generator” after just a couple of months
  • Neve – our latest theme – in the top 10 at WordPress.org and has 10,000 active installs; it’s been on the market for less than three months

How did we do this? Here’s the entire strategy:

  1. Send a newsletter mentioning the thing.
  2. Outreach; contact 20 sites that we have a relationship with.
  3. Come up with content ideas around the topics that are related to the product → write and publish on the blogs. Also, look for ways to mention the new products in older content and cross-promote in our existing products.

Doing the above when you’re just starting out will bring 0 results. But at a stage we’re right now, a basic strategy like this results in a successful launch.

Our overall skillset/approach as a business is also very different than what it was four years ago. It is not as much about hassle and luck right now, but more about consistency and deliberate execution. Okay, maybe just 10% luck.

I am a very different person too. Those four years ago I was all about reaching the highest number possible and running everything myself. Now, I’m more focused on structuring things, giving freedom to others and fighting with the urge to “do work all the time.” I am also trying to discover and get excited about other topics – things that are not related to business.

When we launched ThemeIsle more than five years ago, my main sort of dream was to be able to take the whole team to a far away exotic location and work from there – hence the whole pirate theme that’s been with ThemeIsle since the very beginning.

Anyway, it’s been five years now and we’ve finally managed to make that idea a reality! I’m writing this while enjoying the beaches of Goa and having a great time with the team. Most importantly, we’ve finally met our Indian teammates!

Here’s us at WordCamp Pune:

wcpune

goa

The sole fact of being here is indeed a big achievement for me personally. It’s nice to be able to cross that off the list. Still, looking at it now, this is not a huge milestone in the grand scheme of things, and I get just as much joy when spending time with the team at the office.

Back to the transparency reports; what’s very important is that there’s no need for me to treat the reports as a way to communicate with the team anymore. We now have a plan set that I try to stick to. There’s an internal handbook, and I don’t hurry that much into decisions.

With all those changes, developments, and me changing along the way as a person, I’ve come to the realization that this format needs to change as well.

I just don’t feel confident that I’ll have something valuable to share with you each month, on the clock. I’d rather shift this series to off-schedule articles that come only when I really feel that I want to share something and that you – the reader – can also benefit from it in some way. Maybe it’s also a different period for me personally. I am more humble now, willing to learn and discuss, rather than talk about my ideas all the time.

So, long story short, the transparency reports aren’t really going away, but they kind of are. 🤷‍♂️

But wait, don’t leave just yet! I do have some actual information here, not just my ramblings on things:

🎨 ThemeIsle redesign and changes on the way

Something I told you about in the previous reports is the upcoming ThemeIsle redesign. Setting the visual changes aside, we’ll also introduce a new pricing model with a few significant changes:

a) No more selling generic product bundles

One assumption we’ve been testing with our current pricing is that if a user is getting multiple products from us then they should be more likely to stay subscribed and renew for subsequent years. This is a club-like model, where the person gets a ton of products that are not necessarily related – except that all of them are “for WordPress.” This assumption has turned out to be false, so we need to switch things up.

The main thing we’re going to be experimenting with is building custom bundles for each individual product based on the features that the product delivers.

So for example, instead of selling “a single theme” or “all themes” – and everything that comes with those themes already bundled in, we’re going to sell a theme with either “feature set A” or “feature set A + B.” That way, every user can get a spectrum of features that they need at the moment.

For example, in the Personal plan for themes, you might not need as many starter site templates, or the same level of support, etc. Overall, I think that this model gives the user more freedom of choice and should perform better.

b) Unlimited sites for Neve Pro

Our pricing models haven’t been all too friendly if you’re an agency building lots of sites for clients. We want to change this with Neve Pro.

All three of the Pro plan variations will support unlimited sites.

There’s just no other way around it in the current stage of the marketplace. For example, if you’re an agency building 100 client sites on Hestia, it costs you $4,000. If you’re building 100 sites on Astra, that’s $59. A big difference, to say the least.

c) First-year-only discounts

While it was rough at the beginning, the WordPress community is now pretty okay with yearly subscription models. Still, the renewal rates are not super huge (40% in our case), but it still helps us plan long term and devote more human resources to supporting and maintaining our core products.

The next step in this evolution, it seems, is offering first-year discounts. Some companies in the space are already doing this – like WPForms.

The concept itself isn’t new, that’s for sure. The hosting industry has been abusing it for years. Or, okay, maybe abusing isn’t the right word, but they have been relying pretty heavily on it.

For instance, buying a SiteGround hosting plan for a year is very affordable – around $47 in total. But when you’re about to renew for the second year, that’s $143. This is a huge bump, more than 3x!

We don’t plan on going this extreme. We’ll settle on a small discount for the first year, just to make it easier for the user to try the product out and see if it’s right for them. Then, when the time for renewal comes, the small price bump shouldn’t be such a problem since they’ve already seen the value that the product brings.

At the same time, considering these changes, I do understand that the design change of the site in itself is a huge move, and will impact sales/downloads on its own. So when we add pricing changes on top of that, it becomes really hard to attribute the results to any particular factor.

This is all still pretty much on the drawing board, but I hope I’ll be able to share some learnings as soon as the new design and pricing model are implemented.

🐻 Otter and the future of block editing in WordPress

First off, you might want to check out the new version of Otter – our free plugin delivering new Gutenberg blocks and a whole template library to make your work with the new block editor easier.

The sole existence of this new implementation of the plugin has been a surprise to some of you. For instance, one day a friend said to me something along the lines of, “So you guys said you aren’t working on anything major for Gutenberg, then what is this?!”

I wasn’t lying. Building any significant add-on for Gutenberg wasn’t something we planned on doing. All we wanted to do is make sure that our current plugins are ready for Gutenberg and that they will deliver good user experience.

However, Hardeep didn’t care and took the initiative. With the freedom to work on pretty much whatever he wants to work on (apart from his support team duties), he started to get involved.

Together with Marius, they started working on and releasing integrations for our existing plugins one by one. Then, the focus shifted to rebuilding the initial implementation of Otter and then coming up with new elements to enhance the Gutenberg experience even further.

So right now, Otter offers a range of interesting blocks, such as, Section, Advanced Heading, Button Group, Service, Pricing, Testimonial, Google Maps, About the Author, Post Grid, Card, Font Awesome Icons, and Sharing Icons. Apart from that, there are also Gutenberg-compatible templates, which you can import with one click. Each new block also allows the user to add custom CSS, and there are dynamic columns to help structure the whole page better.

With things going this quickly, we sort of all jumped on the bandwagon and started contributing to Otter and see how we can help. The themes team did a lot of testing, while I focused on giving product feedback. When all added together, we now have an awesome add-on plugin for the new block editor with a ton of new features, and all of them optimized to work with most themes.

Right now, the goal with Other is to build it up into a platform, not just a collection of blocks. With the blocks we have in it so far + the templates library + the advanced columns approach + the custom CSS, we are planning to build a third-party ecosystem for users who want to design good-looking templates on top of this enhanced Gutenberg experience. For example, here are some block templates that originated from Hestia, now in the Otter library:

Hestia blocks

Lots of people complain about the new editor, and for various reasons – chiefly related to UX. However, we don’t need to focus on that too much, and instead look at the bright side. The new editor brings up and standardizes some essential concepts and makes it overall easier for casual users to build good-looking pages. With solutions like Otter, we can tweak this or that and further build on what’s good in Gutenberg.

Okay, this is all I have for you now, but there are two questions I want to end with:

First: How do you see the future of the new editor?

Second, and a bit more complex question: What’s your business structure from a legal perspective and where are you based? Do you have individual companies all with their own purposes, or is everything under one umbrella?

This topic is something I’m really interested in, and I have been for a long time now. There is no information on the web that comes from founders, and everything that is there seems a bit grey. I would love for this to be more transparent and simpler.

If you want to share, you can do it in the comments below (in a public way) or email me at hi @ ionutn dot com.

That’s all I have for you this month! 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.

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